DEPARTMENT OF COMMERCE AND LABOR 
BUREAU OF MANUFACTURES 

JOHN M= CARSON, Chief 



FLOUR AND WHEAT TRADE 

IN 

EUROPEAN COUNTRIES AND 
THE LEVANT 



By 

MACK H. DAVIS 

Special Agent, Department of Commerce and Labor 



TRANSMITTED TO CONGRESS IN COMPLIANCE 
WITH THE ACT OF MAY 22, 1908, AUTHORIZING 
INVESTIGATIONS OF TRADE CONDITIONS ABROAD 




WASHINGTON 

GOVERNMENT PRINTING OFFICE 
1909 



DEPARTMENT OF COMMERCE AND LABOR 
BUREAU OF MANUFACTURES 

JOHN M. CARSON, Chief 



FLOUR AND WHEAT TRADE 

IN 

EUROPEAN COUNTRIES AND 
THE LEVANT 






By 

MACK H. DAVIS 



Special Agent, Department of Commerce and Labor 



TRANSMITTED TO CONGRESS IN COMPLIANCE 
WITH THE ACT OF MAY 22, 1908, AUTHORIZING 
INVESTIGATIONS OF TRADE CONDITIONS ABROAD 




WASHINGTON 

GOVERNMENT PRINTING OFFICE 
1909 



\A- 



\>>» 



K^ 



0. OF D. 

Aucre 11909 



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CONTENTS, 



Page. 

Letter of submittal 5 

United Kingdom 7 

Flour purchases 7 

Causes of decreased trade 10 

Increasing capacity of mills 10 

Transportation 14 

Quality of shipments ] 9 

Bad business methods 22 

Trade at Liverpool 27 

Trade at Manchester 33 

Trade in Ireland 36 

Trade in Scotland 42 

An inviting field 49 

Inspection and certification ' 55 

Milling methods 62 

Conditions reviewed 69 

Germany 71 

Flour industry 71 

Animal foodstuffs 76 

Trade at Hamburg 82 

Drawback system 85 

Belgium 88 

Denmark 94 

Finland 99 

France 104 

Foreign flour excluded 104 

Durum flour and wheat 109 

Italy : 113 

Netherlands 118 

Good market for flour 118 

Trade at Rotterdam 122 

Norway 127 

Sweden 133 

The Levant 137 

Asia Minor , 137 

Turkey in Europe 141 

Greece 146 

Egypt 146 

Transportation 152 

Shipments to Hamburg 152 

Shipments to Rotterdam 157 

Shipments to British ports 160 

Restriction of speculation 164 

3 



LETl^ER OF SUBMl'lTAL 



Washington, June 1, 1909. 

Sir : I submit herewith a report on the Flour and Wheat Trade in 
European countries and the Levant, based on personal observation 
and inquiry under instructions from the Department of Commerce 
and Labor. With no disposition to conceal unpleasant facts, to 
omit remark upon methods ill advised, or to ascribe plausibility to 
things impossible, the writer has endeavored to view the prospect of 
extending the flour trade of the United States as something likely 
of accomplishment. He was justified in this view by the favor with 
which the American milling industry received the proffer of the 
Department of Commerce and Labor to investigate foreign markets 
with a view of extending trade, and by the universal courtesy of treat- 
ment and fraternal greeting accorded to him wherever he has gone 
by importers and merchants whose interests are allied with flour 
milling. 

Conditions that obtain in the countries visited justify the convic- 
tion that with a few not difficult changes material progress will be 
made in the sale of American manufactured products of almost every 
description. Intelligent and persistent effort is necessary, and the 
transportation companies need to realize the importance of delivering 
to the foreign customer with the greatest possible despatch the goods 
he buys from America. Millers and other manufacturers must rise 
to the occasion of meeting the requirements of the foreign market 
and farther impressing upon Europe and the Levant the merit which 
actually attaches to American products in a greater degree than to 
those of any competitor. If these reports have seemed to reiterate 
the' features of quick transit, high quality, advertisement, and per- 
sonal effort required to inform consumers abroad of what America 
has to sell, it is because these above all are essential to the growth of 
trade. Competition is no keener abroad than it is in America. 
Methods that have served at home to strengthen trade may be applied 
with equal confidence to building it up abroad on a great variety of 
products, including flour, always, however, with the particular needs 
of the country in view where trade is sought and where governmental 
protection does not discriminate against the commodity. Merit, more 
than cheapness of price, obtains the most profitable trade. Certainty 
of quality holds the buyer. 

In flour, America's natural wheat resources, coupled with the high 
standard of excellence in the art of flour making attained by her 

d 



b LETTER OF SUBMITTAL. 

merchant millers, would insure her a constant growth of foreign 
trade as compared with competitors, other things being equal. But 
other things are not equal, as these reports endeavor to show. Re- 
straining artificial barriers may be modified and more effective trans- 
portation facilities will be afforded beyond a doubt. Millers are 
now, and will continue to be, encouraged by the possibilities before 
them. But they will not realize the full measure of their reasonable 
expectations until, by well-advised legislation, a proper check in the 
United States, as in other lands, is placed upon the great grain market 
centers. So long as merchants and others with abundant means and 
credit are by law and custom granted opportunities for almost un- 
limited speculation in wheat with all its attendant misleading and 
disturbing statements as to crops, supplies, and prospects, with 
uncalled for fluctuations in price and fear of " corners," incident 
to large accumulations of wheat for speculative purposes, just so 
long will foreign buyers of flour hold back from American mills a 
large share of the trade that would otherwise go to them. This hesi- 
tancy of trade is not brought about by high prices or low prices, but 
by the fear that, whatever the basis may happen to be, it may be 
manipulated or false, or subjected to such sudden changes as will 
cause to purchasers loss or disaster. It is here that the equality with 
competitors ceases as regards American millers. They have greater 
capacity and more and better material from which to make the best 
selections, but their controlling markets for wheat lack the stability 
that characterizes foreign grain markets, where the natural laws of 
supply and demand more nearly determine the price and influence the 
trend of trade. 

Thus the optimism that must go with enterprise lacks the support 
which a sober sense of sound commercial policy enacted into law 
would give it. So the American milling industry, the greatest of its 
kind in all the world, with much of opportunity and promise open to 
it, must, before fully realizing upon these valuable assets, await the 
time when the development of broader business sagacity will relegate 
uncontrolled speculation to the things that were. In this connection 
the section of the reports treating upon the restraint of speculation 
in breadstuff s in Germany and elsewhere in Europe may be of inter- 
est. The wisdom of such limitation to the actual needs of legitimate 
purchase and sale of foodstuffs is evidenced by the prosperity ap- 
parent in flour milling wherever, by custom or law, unnecessary trans- 
actions are held in check. 
Respectfully, 

Mack H. Davis, 
Special Agent, Department of Commerce and Labor. 

To Hon. Charles Nagel, 

Secretary of Commerce and Labor, 



FLOUR AND WHEAT TRADE IN EUROPEAN 
COUNTRIES AND THE LEVANT. 



UNITED KINGDOM. 

FLOUR PURCHASES. 

SITUATION OF AMERICAN- MILLED ARTICLE IN ISLANd's MARKETS. 

The statistical position in respect to wheat and wheat flour of 
the United Kingdom of Great Britain and Ireland is substantially 
as follows: 

The annual consumption of wheat flour is generally conceded to be 
about 42,000,000 sacks of 280 pounds each, equaling 60,000,000 barrels 
of 196 pounds each. Of this quantity, there has been imported an- 
nually of late years wheat flour amounting to 7,860,000 barrels. The 
United States in recent years, 1906 and 1907, has supplied annually 
about 5,500,000 barrels of the United Kingdom's imports, the remain- 
ing requirement, say, 2,400,000 barrels, coming principally from 
Canada and Australia, a relatively small part being furnished by 
France and Hungary. Dating back some eight years and covering 
a period of ten years previously, the imports were much larger than 
for the past four years, reaching as high as 13,200,000 barrels, wdien 
the mills of the United States supplied fully four-fifths of the 
requirement, according to the opinion of the older importers of flour, 
who deplore the falling off of flour imports and the decline of imports 
from the United States, now but about one-half of their one-time 
quantity. 

VARIOUS CONTRIBUTING CAUSES. 

The causes leading up to this decline in exports of the United 
States to the United Kingdom are many, but the more important 
are seven in number, and they must be presented here and thought- 
fully considered by American millers in so far as their action may 
suggest, remedies, if the business of the past is to be regained. In 
the first place, there is the increased productive capacity and large 
financial resources of the millers of the United Kingdom. An im- 
portant bearing is the active campaign constantly carried on of 
late by many of these mills to educate the British consumer to the 
use of home-milled flour. That no similar work or advertising effort 
seems to be carried on by American mills is a grave oversight or 
neglect. The size of the British miller's pocketbook, his keen desire 
for more business, and his location are all powerful factors. If 
Great Britain produced enough wheat and of the proper quality, 
the competition between the British and the American miller would 
be disastrous to the latter. Fortunately for him, however, the miller 



8 FLOUR AND WHEAT TEADE. - 

of the United States has the advantage of location in respect of 
quality and quantity of the raw material. The British miller has 
less than one-fourth of the home requirement grown on home soil. 

BRITISH WHEAT AMERICANS INACTIVE. 

The quality of this home wheat production is not all that might be 
desired for best results. However, such advantages as the British 
miller has he is now making the utmost of by his continuous system of 
advertising and pushing methods for placing his goods with buyers, 
whereas a few years ago the situation was exactly reversed, when the 
American miller was the pushing, active factor in the trade. I hear 
it often stated that the British miller has at last awakened to his 
possibilities; he is certainly making the best of them just now. 
While this subject will be discussed later, it is essential now that 
American mills be advised as to the apparent eifect of less active work 
on their part and urged to bring the natural remedy into the case as 
soon as possible by concerted or individual effort. 

A second consideration is the custom for many years past on the 
part of the American railroads and Atlantic steamship companies of 
making freight rates lower on wheat, or the millers' raw material, 
than on flour, his finished product. If the American miller had no 
competition abroad, this practice might be permissible, but in view 
of the excellent mills in countries other than our own it must be ap- 
parent that lower rates on wheat than on flour simply arm competing 
foreign mills with cheap wheat wherewith to beat down the price of 
American flour abroad and thus displace it. Where the bulk of a 
finished product is the same as the raw material, as in the case of flour 
and wheat, it seems to me that good public policy would suggest, in 
the case of a surplus crop, as wheat in the United States always is, 
that the finished goods rather than the raw material should be moved 
to the seaboard at such discrimination in rates favorable to the finished 
product as would overcome the arbitrary difference in rates established 
by the foreign-owned steamship companies now controlling the ocean 
carrying trade. 

EFFECT OF BAD WHEAT CROP, DURUM RAISING, ETC. 

A third cause contributing largely to loss of flour trade in Great 
Britain came at the critical time when British millers were awakening 
to what they might do. It came in the shape of a partial failure in 
1904 of the wheat crop of the United States. Other countries were 
more favored than the United States as to quality of wheat, and the 
twelve months subsequent to the harvest saw the British miller more 
firmly intrenched than before. Promised protective measures in the 
United Kingdom's fiscal policy had encouraged extended remodeling 
and building of home mills, and it was unfortunate and harmful to 
American milling interests that an inferior crop of wheat should 
appear at this particular time as a special handicap. The unfavorable 
results of that crop still exist. 

Fourth, it may be stated that the introduction and large production 
of an inferior wheat in the Northwest, known as macaroni or durum 
wheat, has had much to do with loss of trade in American flour. To 
a considerable extent the confidence of foreign buyers has been shaken 
by the thought that possibly a considerable percentage of this durum 
wheat might find its way into our flour. So far it has not appeared 



UNITED KINGDOM. 



9 



to any marked extent, but the fear is upon the buyers and every means 
to reassure them should be taken by exporting mills. 

MILLING METHODS TRANSPORTATION DIFFICULTIES. 

As a fifth contributing cause the methods of some mills are such as 
to reflect discredit on all, or at least to destroy confidence in the high 
standard of excellence that for many years characterized American 
flour. A lowering of specific qualities in some instances and false 
branding have made great " talking points " for those striving to 
displace American fiour. 

A sixth element has been the irregular arrivals and the delays in 
transit. These features, well known to American millers, still pre- 
vail to vex and embarrass the flour importer; and not quite all has 
been done that can be done by the miller to overcome the bad results 
that are sure to follow such recurring disappointment as comes from 
delayed shipments. 

Seventh, the political status here as relates to possible tariff changes 
in Great Britain is influential in restricting our flour trade to a 
greater extent than is generally understood. It may be put down as 
one of the potential factors with which we have to deal. Should the 
British nation amend its tariff laws on the protective lines being 
urged, the American mills would be at great disadvantage unless 
some form of reciprocity could be provided by adequate action of the 
Congress of the United States. 

That such a policy of protection is quite possible of adoption at no 
far distant day is the general impression of business people connected 
with grain and flour with whom I have come in contact. Many such 
have in previous years aligned themselves with the free-trade wing of 
the Unionist party, or have been supporters of the present Liberal 
government which went into power three years ago. There is an 
apparent change in sentiment toward a protective policy for Great 
Britain. In its adoption it would seem that flour from the United 
States, and possibly wheat and corn also, would be discriminated 
against in favor of similar products from Great Britain's colonies. 
In such an event we would have to face the wheat of Canada, whose 
capacity at present is to grow 100,000,000 bushels of surplus wheat, 
and whose acreage in wheat is increasing 10 to 20 per cent per annum. 
Her milling industry, now boasting some of the largest mills in the 
world, has grown by leaps and bounds the past six years. 

EXPORT STATISTICS. 

Commerce and navigation returns show the following export a- 
tions of wheat flour and wheat from the United States to the United 
Kingdom for the fiscal years stated : 



Year. 


Wheat 
flour. 


Wheat. 


Year. 


Wheat 
flour. 


Wheat. 


1891 


Barrels. 
7, 037, 420 
9, 603, 910 

10, 361, 680 
9, 987, 179 
8, 825, 277 
8,211,236 
8. 256, 630 
9,132,465 

10,233,360 


Bushels. 
29, 820, 650 
67, 293, 960 
72,513,134 
50, 868, 680 
54, 373, 341 
43, 648, 077 
55, 742, 689 
80,163,805 
74,613,304 


1900... 


Barrels. 
10, 257, 028 
10, 854, 573 
9, 059, 722 
9, 835, 386 
8, 673, 943 
2, 455, 667 
5,366,679 
5,356,024 
6,764,072 


Bushels. 
62,774,870 
78, 574, 752 
77, 544, 418 
47,590,161 
23, 589, 371 
3 907 152 


1892 


1901 


1893 


1902 


1894 


1903 


1895 


1904 


1896 


1905 


1897 


1906 


15,457,639 
26, 129, 346 
43,828,532 


1898 


1907 


1899 


190S . 







10 FLOUR AND WHEAT TRADE. 

Other wheat preparations exported to Great Britain have also 
declined; "preparations of breadstuffs for table food" (breakfast 
articles mostly made from wheat) were valued at $1,046,496 in 1898, 
$1,390,281 in 1900, $1,281,967 in 1908, $884,771 in 1904, $752,992 in 
1905, $730,333 in 1906, and $556,363 in 1907. 

CAUSES OF DECREASED TRADE. 

INCREASING CAPACITY OF MILLS. 

The first of the seven leading causes contributing to the decreased 
trade of the United States millers in -the United Kingdom during 
recent years, which will be considered more in detail, is the magni- 
tude and resourcefulness of the British mills. 

At present there are in Great Britain and Ireland about 1,500 flour 
mills of all classes. Of these, 1,000 may be said to produce five-sixths 
of all the flour made in the Kingdom. The large mills are located 
at the more important ports of entry and number about forty-five 
or fifty. Eight of these coast mills have capacity to produce from 
100 to 250 sacks of flour per hour. Since a sack of flour is reckoned 
at 280 pounds, and as most of the mills of large capacity consider 
twenty-four hours as a day of operation, the capacity for output of 
flour can be placed at from 3,500 to 8,500 barrels per day for these 
eight large mills, and they thus compare favorably in capacity with 
the hirge milling plants in the United States. Some forty other 
mills are rated at 25 to 50 sacks per hour, equal to 800 to 1,600 bar- 
rels daily capacity. The remaining mills scattered throughout the 
Kingdom, while of much less capacity, are in most cases very sub- 
stantial concerns with old and well-established trade, grinding for 
the most part on wheat grown in the Kingdom, but to a considerable 
extent blending with their product, when conditions justify, Ameri- 
can or other flour suitable for improving the quality of their product. 
The practice of blending flours of various character to improve the 
general result is one that has been carried on to a large extent by 
many English mills for many years. For this purpose American 
hard-wheat flours, particularly spring-wheat flours on account of 
their great strength, were some years ago in great demand, and are 
still used, but to a much less extent. To the causes leading to their 
discontinuance I have given much attention, and will later refer 
more directly to this subject. 

PROPORTION or BRITISH MILLED FLOUR. 

That there are mills enough in Great Britain of sufficient capacity, 
if worked to reasonably full time, to produce all the flour the country 
could consume becomes evident upon inquiry among the best 
informed, although actual statistics are lacking. My belief is based 
largely upon the opinion and figures presented by Mr. James W. 
Rush, editor of " Beerbohm's Corn Trade List," a daily commercial 
and statistical journal recognized as authority by the grain and mill- 
ing trade. It is therefore a significant fact that the imports of flour 
from year to year continue hirge, although the percentage of flour 
imports to wheat imports for the past period of six vears ending 
with 1907 is but 14.5 as compared with 24 for 1896 to 1902, 21.6 for 
1890 to 1896, and 22 for 1884 to 1890. 



UNITED KINGDOM. 



11 



The imports of wheat, however, into the United Kingdom for 1907 
were 97,108,800 hundredweights of 112 pounds each, equal to, say, 
181,400,000 bushels of 60 pounds each; and for the six-year period 
ending 1907 averaged 172,000,000 bushels, as against three-fourths 
that quantity for the periods ending with 1901 and 1895, while for 
the six years ending 1889 they were but little more than half the 
quantity imported in the last period ending 1907. Thus, while Great 
Britain's imports of wheat have steadily increased Avith the growth 
of population and the increased per capita consumption of flour, the 
imports of flour have not increased in the same ratio. The conclu- 
sion is that the home mills, while not employed to the full extent of 
their capacit}^, have made a very creditable showing. 

IMPORT STATISTICS. 

As American millers will be interested in the volume of British 
imports in recent years, I give below the flour imports by the United 
Kingdom for the past twelve years, as furnished by Mr. H. B. Tasker, 
the retiring iDresident of the National Association of Flour Importers. 
The table is in hundredweights of 112 pounds each, as follows : 



Year. 


Hundred- 
weight. 


Year. 


Hundred- 
weight, 


18Q6 


21,320,200 


1902 


19, 386, 341 
20,601 191 


1897 


18.ti80.fifi9 1 


1903 


1898 '21,017,109 


1 1904 


14 722 893 


1899 22, 945, 708 


19r5 


10, 954, 763 


1900 21,548,131 i 


1906 


14 190 300 


1901 22. 576. 430 


1907 


13, 297, 357 




1 





Reduced to barrels the imports of flour for 1907 were 7.440,000 bar- 
rels, and for the six-vear period 1902-1907 averaged 8,600,000 barrels, 
against 11,900,000 barrels, the average for the six years 1896-1901. 

The progress and success of the British milling industry in thus 
caring for the increased demand for flour need in no wise discourage 
American millers when careful analysis is made of the entire sit- 
uation. The changes toward improvement that the art of milling 
has experienced in the past thirty years were not applied by the 
British miller at a date as early as was the case in the United States. 
For many years American mills, having adopted modern methods 
for flour making, held precedence in point of quality over the goods 
made in Great Britain. Time has, however, worked decided im- 
provement with British mills. To-day many of them are as fully 
up-to-date as the mills of any other country. While their energetic 
methods, their push, and 23ersistence have strengthened them finan- 
cially and extended their hold upon the buyers, they have not re- 
duced the quantity of imjDorted flour as their capacity and ability 
would indicate was possible. Why this is so becomes of interest to 
millers in the United States. 

CONTEST FOR TRADE BLENDING OF WHEAT. 

To properly understand the case, a study of underlying conditions 
in the habits of the consumers must be made. There is a reason why 
so much flour is imported, and there is good ground for hope that the 
volume of imports can be largely increased. The British miller 
will not sit idly by while the work is going on, nor will the task of 



12 FLOUR AND WHEAT TRADE. 

regaining lost trade be an easy one for American mills. But the 
trade is here and can be had as the result of well-directed effort 
systematically followed up. This may seem a strong assertion to 
many who are familiar only with the aspect of the case from an 
American view point; but with due consideration given to all the 
circumstances attending this complicated proposition, I feel sure of 
the truth of the statement. 

The science of flour milling, as practiced here and possibly unex- 
celled by mills located in other lands, is handicapped now and prob- 
ably always will be by lack of such regular and excellent supplies of 
raw material as are found at our mill doors in the United States. 
True, the English miller may have the pick of the world's wheat 
crop, such as it is, after it gets here and after the mixing houses at 
the ports of origin have had their turn at it and their profit out of 
it. Not all the mixing of wheat is done in the United States. The 
wheat shippers the world over are none too particular to send out 
the best of their products. The best is valuable, before shipment, to 
bring up the grade of the poorer qualities of wheat. Against this 
practice the British miller has always to contend. In this respect 
his troubles are not likely to grow less as time goes on and the art 
of wheat mixing improves. Last year he got choice wheat from 
Argentina because, perhaps, there was so little poor wheat to be had 
from that country's excellent crop. But the crop will not always 
be 62 to 64 pound wheat, sound and dry, as it was that year. 

The poor wheat of any country must be marketed, and it is only 
natural that the poorest of a surplus crop should somehow work its 
way into the country's exports. At any rate it generally does. The 
imports offered from Russia and India certainly show to one versed 
in wheat the fine hand of the port blender of grains. 

AMERICAN ADVANTAGES. 

The British miller, always dependent on foreign lands for three- 
fourths of all he grinds, can never approximate, in quality results, the 
miller located in the section where the surplus wheat is grown. lil 
this fact lie the strength and hope of the American miller. Let hii»= 
see to it that the flour he sends abroad is characteristic of the sectioiff" 
where his flour is made. He should also avail himself of the knowl- 
edge the flour buyers have of the flour merits of the three distinct 
varieties of wheat grown in the United States — ^hard spring, hard 
winter, and soft winter wheat — and then let him produce the highest 
class goods possible, retaining the distinctive characteristics in his 
flour, and he will be laying the foundation for trade that none can 
take from him. 

But this is not all he must do. The conditions of trade as they actu- 
ally are, and not as we would like to have them, must be met. The 
British miller has forced the issue in his effort to convert the buyer. 
He annually spends large sums to advertise and popularize his flour. 
Competition between British mills is strong and the effort to build up 
trade is strenuous. In the effort of convincing bakers of the merit 
of British-made flour, rewards and prizes are offered to foremen in 
bake shops. Printer's ink is not spared. In fact, every available 
means within reason, even to an appeal for support of home industry 



UNITED KINGDOM. 13 

on patriotic grounds, is resorted to in order that prestige for home- 
milled flour may be obtained. . • 
All this effort is doubtless necessary, for without extraordinary 
effort and constant hammering the buyers, if left to their own judg- 
ment, would scarcely increase their purchases of an article generally 
acknowledged to be inferior. I am convinced of the superior quality 
of American flour of high class over the best that the British mills 
can produce from the inferior material they have to work with. The 
wonder is that they do so well, both in quality and in sales. There 
is a natural advantage, however, with the American milled flour when 
it is distinctive in characteristics and high in class, arising from the 
superiority of the wheat from which it is made. This is a fact that 
should be effectively impressed upon the British baking trade, which 
supplies more than half of all the bread consumed in the Kingdom. 

HOME AND PUBLIC BAKING LONDON's TRADE. 

It is proper to state that while bread is baked in the homes of the 
people in most of England and in Scotland and Ireland, the cus- 
tom in the thickly populated southern part of England is entirely 
different. There the man with the bake shop supplies the daily bread. 
In general the shops are small, though there are many large bread- 
baking establishments. A line drawn east and west through Bir- 
miiigham coidd be said to separate the population using homemade 
bread from those accustomed to bread baked in shops. Thus the 
northern section of England is the largest consumer of home milled 
and imported winter wheat flour, especially adapted to home baking, 
while the southern section, because of the professional character of the 
baking, requires flour of greater strength, like our spring and hard 
wheat flours. The bakers believe that the stronger the flour the more 
bread it will yield. Having a very strong flour to start with, they can 
blend in considerable flour inferior in quality or lower in price. It 
is to this baking trade that our American hard-wheat flours naturally 
appeal. Probably much more than one-half England's population 
are users of baker's bread regularly, and bread is used as food to an 
extent greater by one-third than in the United States. 

The coast mills of England are located mostly in this southern sec- 
tion. London, of course, furnishes the greater part of the demand for 
flour, since its population (in Greater London) is near 7,000,000. 
Fully 9,000,000 people are supplied with bread or flour by the mills 
and bakeries in and around London within a radius of 40 miles from 
the city. London's weekly consumption of flour is placed at 130,000 
sacks of 280 pounds each, equal to 180,000 barrels. Of this the metro- 
politan mills, or those immediately within the city, supply 50,000 
sacks, or, say 70,000 barrels. The near-by mills, located within 30 
or 40 miles, supply 40,000 sacks, say 55,000 barrels. There is thus left 
a requirement of 40,000 sacks, or 55,000 barrels, weekly to be supplied 
by foreign mills. 

PEOTECTIVE MEASURES NECESSARY. 

The incentive that spurs on the local mills to such active efforts for 
trade is the knowledge that to displace the foreign flour means nearly 
double the business for them that they are now doing. American 
mills must awaken to the situation and either by concerted effort or 



14 FLOUR AND WHEAT TEADE. 

special individual work, protect their present share in the imported 
flour or it will only be a question of time until foreign purchases of 
flour for the London market will be a thing of the past. As one 
large importer remarked to me, " The imports of flour will continue 
onlj so long as the present generation of importers continue in the 
business in which they are engaged and which, perforce, they must 
continue because they are too far along in life to venture into other 
lines. There are no new accessions to the ranks of importers. The 
young men are taking up other lines more promising of profit and 
with a better future." This statement is pretty generally confirmed, 
and im|)resses me as being in line with the apparent condition. Thus 
there is emphasized the need now of such work on the part of Ameri- 
can millers as will promise additional trade and also retain that which 
they now have. 

The field for effort is with the bakers, who should be educated to 
continue their old-time practice of doing their own blending of such 
high-class American flours as will produce better bread and more of 
it to the pound than can be made from the mill-blended flours made 
from the mixture of wheat to Avhich the local mills are limited. 

TRANSPORTATION. 

The second important cause contributing to decreased trade in 
American flour with the port of London is, in general terms, the 
matter of transportation. Both inland in the United States and by 
steamship on the ocean and upon arrival at the port of London, there 
are practices which if improved would tend to increase the trade. 
The importers here for many years have labored to overcome the 
difficulties without material success. They have had the moral sup- 
port and the active aid of the American mills in all the work of re- 
form thus far attempted. That little progress has been made has 
been discouraging, and if efforts at this end have been relaxed it is 
because flours from other lands can be and are secured more readily, 
more promptly, and with less handicap than from American ports. 

In the United States the railroad rates from inland cities to sea- 
board are less on wheat for export than on flour for export. On the 
ocean, while wheat and flour can be stowed with about equal facility, 
and while the cost of handling flour, all things considered, is less than 
is the case with wheat, and the shrinkage on flour is nothing, while it 
may be considerable on wheat, yet flour is generally charged a much 
higher rate for transportation via ocean than is wheat. Some ships 
and some lines are better prepared for handling wheat than flour and 
the competition in rates gives wheat the preference. 

RATE ADJUSTMENTS WORKING OUT CHARGE. 

In the absence of any practicable method for equalizing ocean rates 
on wheat and (lour, it would seem that the only recourse is in readjust- 
ment of inland rates by American railroads, through whose coopera- 
tion, in the shape of a preferential rate on flour instead of on wheat 
for export, the vast industry of milling of the United States could be 
greatly aided without detriment to any other industry and with no 
loss in actual revenue to the railroads. Good public polic}^ would 
seem to dictate such cooperation. There is just so much foodstuffs to 
be moved every year. The mills can convert it all into flour if given 
the opportunity, but if wheat, the raw material, is attracted from the 



UNITED KINGDOM. 15 

mills bv lower transportation rates, both rail and ocean, the American 
miller will continue to work for foreign trade under serious disad- 
vantages, and the country will continue to lose the increment that 
SYOuld otherwise accrue in converting the raw material into the 
finished commodity. 

At London the arbitrary " working-out charge," so-called, imposed 
by the steamship companies in the Atlantic trade, is a discrimination 
against American flour, since there is no " working-out charge " ap- 
plied to flour coming from Australia or from France, Hungary, 
Belgium, or other European countries. This discrimination amounts 
to one shilling and three pence per ton, or, say, three cents per barrel — 
quite sufficient to turn trade, other things being equal. 

The bill of lading in use in the Atlantic trade contains the so- 
called " London clause," which makes this arbitrary charge possible 
above the current rate of freight, and such a clause does not form 
a part of the Australian or European bills of lading. My opinion 
is that fairness to the American shipper of flour, as well as to Amer- 
ican shippers of other commodities to the port of London, would 
justify the Government in seeking such conference with the Atlantic 
steamship companies as will eliminate this highly objectionable 
" London clause " from the bill of lading. The fact that flour comes 
to the London market from Australia at the same or at lower rates 
than the ocean rate from Atlantic ports of the United States should 
be given consideration by American railroads and others interested 
in finding greater outlets for American products. 

EXCESSIA'E DELAY EN ROUTE. 

The time required for shipments of flour from points of origin in 
Australia to London actually averages less by nearly a month than 
is required by the average shipment of flour from interior United 
States points to London and other United Kingdom ports. I wish 
to lay especial stress upon this matter of slow transit time for Amer- 
ican flour, because it is a subject of general complaint at present and 
has been recognized by all as a serious handicap to the extension of 
American trade. Dela^^s in shipment, after bills of lading have been 
issued, work seriously to the disadvantage of the United States flour 
shippers. Buyers of our flour, and in turn their customers, sufl^er 
severely at times by the nonarrival of goods. The importers here 
seem incensed almost to the point of disgust in the knowledge that 
repeated efforts for several years have failed to remedy the evils of 
delays in transit. They are naturally insistent that something be 
done to avoid delay and the irregularity attending most shipments of 
American flour. They naturally turn to such sources of supply as 
they know from experience will not be attended by vexatious delays 
and irregular arrivals. The blame for this trouble, which has ex- 
isted for several years, ma}^ be about equally attributed to the steam- 
ship companies, the railroad companies, and the millers themselves. 

To cite examples as to transit time: I have seen the documents 
showing shipment and arrival of Australian flour of recent date, 
none of which required over fifty-three days in transit, and am 
assured that practically such time can be depended upon by London 
importers of Australian flour, while flour from the United States 
comes in so irregularly and requires so long a time that no one in the 
trade feels like placing any dependence upon when it will get here. 



16 



FLOUR AND WHEAT TRADE. 



The following lists of shipments, from Kansas and Minnesota mills, 
are in no wise exceptional, for many buyers have been consulted on 
the subject and they are all of one mind in deprecating delay in 
arrival of purchases. 



Bill of 
lading. 


Date. 


Route. 


Steamer. 


Arrived. 


Days. 


821 


Oct. 14,1907 
Oct. 18,1907 
Oct. 21,1907 
Oct. 30,1907 
Nov. 5,1907 
Dec. 27,1907 
Dec. 31,1907 
Jan. 3,1908 
do 


Philadelphia 


Eagle Point 


Jan. 1,1908 
Jan. 25,1908 
Feb. 18,1908 
Jan. 27,1908 
do 


79 


981 


do 


North Point 


99 
120 


1282 


do 


Michigan 


269 


Newport News 


Rotterdam 


89 


279 


do 


do 


83 


437 


do 


Cynthiana . 


Mar. 23,1908 
Apr. 24,1908 
May 11,1908 
do 


87 


18 


St. John 


Montana *• 


116 
129 


469 






468 


do 


rlr. 


129 













MORE CONCRETE EXAMPLES. 

A large importing firm, whose business has been heavy with Ameri- 
can mills in former years and which feels keenly the losses incident to 
irregularity in arrivals, writes as follows : 

We attach a list of all the shipments made to us last year from a Mimiesota 
mill, which shows the long average time in transit of seventy days per ship- 
ment, though as each shipment is appropriated to different specific buyers, we 
are unable to average the deliveries or do anything to minimize the confusion 
caused by delay. We have no hesitation in saying that if one could rely on 
flour arriving as a rule, within, say, forty -five days, a much greater business 
would follow, and we wish you every success in your efforts to improve the 
service. 

The list referred to is as follows, and the 22 shipments named aver- 
age seventy days: 



Bill of 
lading. 


Date. 


Route. 


Steamer. 


Arrived. 


Days. 


655 


Feb. 15,1907 
Feb. 28,1907 
do 




East Point 


June 10, 1907 
June 12, 1907 
June 26. 1907 
July 10,1907 
June 17,1907 
June 6, 1907 
June 24,1907 
July 10,1907 
do . 


115 


658 


Boston . . , 


Cambrian 


104 


658 


do 




118 


1269 


Mar. 15,1907 
Mar. 21,1907 
Mar. 30,1907 
Apr. 15,1907 
do 


do . 


Columbian 


117 


661 


Philadelphia 


Eagle Point 


88 


47 


Boston 


Mackinaw 


70 


54 


Philadelphia 




70 


108 


do 


North Point 


86 


121 


May 9, 1907 
May 23,1907 
May 31,1907 
June 5,1907 
June 18, 1907 
July 17,1907 
July 27,1907 
Sept. 7,1907 
Oct. 8, 1907 
Oct. 10,1907 
Oct. 15,1907 
Oct. 18,1907 
Oct. 28,1907 
Nov. 29,1907 


do 


do 


62 


181 


do 


...do 


do 


48 


535 


Boston 


Philadelphian 


July 16.1907 
July 23,1907 
Julv 21,1907 
Sept. 14,1907 
Sept. 19,1907 
Nov. 23,1907 
Dec. 22,1907 
do 


46 


585 


do 


Anglican 


48 


681 


Baltimore 


Mobile 


37 


1081 


Philadelphia 


Mackinaw 


59 


977 


Boston . . 


Eagle Point 


54 


243 


do 


Western Trans 


46 


296 


... .do. ... 


Georgian 


80 


303 


do 


do 


78 


826 


Philadelphia 


Mackinaw ... 


Dec. 7, 1907 
Dec. 21,1907 
Jan. 15,1908 
Jan. 25,1908 


53 


866 


do 




64 


928 


do 


East Point 


79 


413 


New York 




59 











As showing how shipments intended by the shipper to arrive about 
two weeks apart are often so handled as to arrive at practically the 
same time, the following is submitted with assurances from importers 
that similar instances by the score can be furnished. 



UNITED KINGDOM. 



17 



Bill of 
lading. 


Date. 


Route. 


Steamer. 


Arrived. 


Days. 


463 


Dec. 31,1907 
Jan. 22,1908 
Feb. 1,1908 
Feb. 14,1908 


Newport News 


Mariana 


May 11,1908 


132 


5 


do 


do 


110 


10 


do 


Rotterdam 


May 18,1908 
do 


107 


20 


do 


do 


94 













These lots were 500 bags each from Topeka, Kans. Aside from the 
fact that, although shipped at about fortnightly intervals, they all 
arrived within a week, is the unfortunate feature that the best time 
attained exceeded three months, while the December 31, 1907, ship- 
ment was out over four months. 

PAYMENT MUST BE MADE ON FIRST ARRIVALS. 

Another buyer had a lot of 500 bags from a Kansas town shipped 
December 30, 1907, that arrived May 11, 1908, while other shipments 
from the same mill, made at a much later date to the same buyer, got 
into London some two weeks earlier. A shipment of 500 bags March 
26, 1908, came to my notice, and up to June 1 only 4 bags had arrived. 
In order to get the 4 bags, the bu3^er had to pay the draft for the 500 
bags and had to surrender the bill of lading for the entire lot before 
he could get delivery of the 4 bags. In a case of a certain 1,000-bag 
lot only 80 bags arrived, and out of another 1,000-bag lot only 375 
arrived, when the bills of lading had to be surrendered before delivery 
could be made. In all these cases the shipments had been traced and 
efforts by cable and letter had been made to locate the missing quanti- 
ties for three weeks, without success, when the cases were cited to me. 
In the meantime the influence of declining markets and the uncer- 
tainty was not having a pleasant effect on the importer, who would 
be a larger buyer of American flour if he could know when to expect 
arrivals. 

Doubtless the steamship people oftentimes overbook the capacity 
of their steamers, with the result that the arrivals of flour after a 
steamer has gotten her load must lie on the dock in the United States 
until the next steamer sails, which may not be for two weeks. It 
sometimes occurs — in fact, must occur frequently — that shipments 
are not moved from American docks for as much as two months, 
since the ocean trip seldom exceeds twelve to sixteen days and is 
often less. The railroads might in exceptional cases require twenty 
to thirty days to move freight from Kansas or Minnesota to the sea- 
board, but ordinarily they need no more than two weeks for the 
inland haul. 

MEASURES FOR OVERCOMING DIFFICULTIES. 

Flour is handled by the importers on a margin of 4 cents to 8 cents 
per barrel, which must cover all charges for services, interest on 
money advanced on the bill of lading, and time allowed the buyer 
(which the importers say runs from ten to sixty days), and often 
includes minor allowances and shrinkages. It must therefore be ap- 
parent that a united effort on the part of millers and transportation 
companies to shorten the time of transit and to secure more regularity 
in arrivals is most important for the encouragement of buj^ers on this 
side. A conference between the representatives of the steamship 

2304—09 2 



18 FLOUR AND WHEAT TEADE. 

lines, the railroads most interested, and the officers of the Millers' 
National Federation might evolve some plan, if undertaken seriously, 
that would overcome the features of this most vexing question. Mil- 
lers could at least arrange for definite time of sailing when closing 
contracts for through rates of freight. Then, by not contracting for 
more ocean room than they know they can furnish the flour for, they 
will neither disappoint the steamship companies nor be disappointed 
themselves. 

The importers here seem of the opinion that the miller does not 
follow up his shipments as he should. They think he does not make 
the proper effort to secure in his ocean contract a specific sailing 
date, which he could do if he desired. Certain it is the miller's in- 
terest in his shipments should not cease when he has contracted his 
through rate for a given quantity of flour. He has not done his 
full duty to his foreign customer until he knows to a reasonable cer- 
tainty when the steamer will take the goods, and, knowing this, he 
should inform his buyer at once by cable. Every miller who exports, 
whether in lots of 500 or 10,000 bags, should keep in close touch with 
the interests of his buyer in this manner. The more of certainty and 
satisfaction he can put into his dealings the more confidence he will 
inspire, and it is a restoration of confidence along these lines that 
flour buyers are likely to insist upon before undertaking seriously 
the work of rebuilding trade that mills of the United States have 
lost. It should be continually borne in mind that disappointments in 
arrivals cause the importers loss and cancellations of orders from 
dealers and bakers, and that the latter always have a ready recourse 
for filling immediate needs by purchasing of local mills. One of the 
best arguments the salesman of the local mill has to offer is that a 
buyer can never know when a purchase of American flour will arrive., 
The elimination of this argument is a positive duty resting on the 
mills and the transportation companies. 

So important is the feature of transportation that every one of the 
importers with whom I have talked urges that the influence of the 
Government be invoked with both millers and the transportation 
companies to the end that the service may be made prompt and trust- 
worthy. 

ADVICE TO SHIPPERS. 

Relative to the matter of promptness and regularity of flour ship- 
ments for export, the following suggestions are offered by importers. 
They should be carefully considered by every flour exporter. These 
suggestions do not differ materially from those sent out by the 
Millers' National Federation in circular No. 74, dated July 9, 1906, 
but they will bear repeating, in view of the experiences on this side 
for the past two years: 

When engaging freight on through bill of lading the following 
points should receive full attention : 

1. See what sailings there are from the port in question; if, say, 
only one a month, get the steamship companies to guarantee that 
they will take the flour on the steamer provided it arrives in time. 

2. Confirm all contracts with the steamship companies and let 
them know when you are shipping out, so that they can be sure of it 
and so not overbook. 



UNITED KINGDOM. 19 

3. Get a guaranty that the flour will not take more than, say, 
tsventy days in transit from the mill to the seaboard. 

4. Get a guaranty that the flour will be cleared from the seaboard 
within, sa3% twent}^ days after its arrival. 

5. If contracting to ship, say, 10,000 bags June-July from the 
West, do not dispatch it from the mill all at one time, say at the end 
of July. Dispatch some of it every three or four days and notify 
the steamship company each day you have done so. 

6. If you are shipping over 1,000 sacks on one contract, divide it up 
and ship part out the first few days and balance later in reasonable 
periods. 

7. If the buyer wants his purchase delivered over a period, do not 
contract over 1,000 sacks by one line at one time unless you get a con- 
tract from the steamship company to divide it up, with a guaranty 
of clearances; otherwise it is all liable to go on one ship and cause 
congestion and expense to your buyer. 

8. Trace all shipments from mill to the seaboard. 

9. Make things as easy as you can for the carriers and then they 
will appreciate flour as freight more than they have done in the past 
and give you better service. 

10. Live right up to your freight and flour contracts. Then you 
will be in position to see that the other parties to the contracts do so 
as well. 

QUALITY OF SHIPMENTS. 

The third and fourth causes that have contributed to lessened 
American flour trade in Great Britain concern the quality of the 
millers' raw material — wheat. I think it was the spring Avheat crop 
of 1904 that was badly damaged by rust. The flour shipped by the 
American millers from that crop could not, in the ver}^ nature of 
things, prove equal to the well-known standard that for many years 
had given satisfaction. 

EFFECT OF DAMAGED AND DURUM WHEAT. 

Some mills continued to ship this inferior product under regular 
brands. When it arrived and was distributed it did not in many 
cases come up to expectations. This afforded a fine opportunity for 
those so disposed to berate American flour generally. Naturally the 
weak points in the American situation were dwelt upon and possibly 
exaggerated. The buyers became prejudiced against flour that they 
had formerly looked upon as expressing the highest standard of 
excellence. It is joroper to state that many of our mills, with due 
regard to the interests of their buyers and the value of their reputa- 
tions, refused absolutely to offer the flour of this unfortunate crop 
under their regular brands, and it would have been far better if no 
spring wheat flour not fully up to the old established standards had 
been exported that crop year. But enough came forward, made 
partly from damaged grain or mixed with hard wheat of character- 
istics other than those possessed by spring wheat of high class, not 
only to disturb the confidence of British buyers in the mills who?e 
flour caused them loss and trouble, but to give birth to the idea that 
American wheat was deteriorating in the qualities heretofore con- 
sidered most valuable. 



20 FLOUB AND WHEAT TRADE. 



UNDERTONE OF DOUBT. 



I find there is a decided undertone of doubt now existing among 
the trade regarding the quality of our wheat. This doubt has been 
strengthened, I think, by the condition on arrival here of numerous 
cargoes of wheat brought from the United States the past three years, 
which, while grading at Atlantic and Gulf ports, failed to come up 
to the expectations of purchasers. Much dissatisfaction has arisen 
among the grain trade* by reason of disappointment in quality. The 
subject has been freely discussed and talked about on the grain ex- 
changes. Following the flour troubles, as it did, the unsatisfactory 
wheat grading has been most unfortunate as affecting the sentiment 
regarding American flour. The flour people found just cause to 
complain of certain numerous parcels of flour when the wheat was 
known to be inferior, and now, in subsequent periods, when the wheat 
is claimed to be right, it develops that dealers in it here have had 
frequent cause, as they claim, for rejection. These dealers assert that 
American shippers refuse to adjust losses occasioned by wheat arriv- 
ing out of condition, the latter standing on the United States seaboard 
inspection, which passed the wheat as sound and up to standard. 
Thus the case against our wheat and flour, as made up by the 
importers of both, who seem to have compared notes, is far from 
favorable to active trade. Yet the fact remains that the United 
States has been producing high-class wheat every crop year since 
1904, and the mills have been able, as have the shippers of wheat, 
to make their proper selections of first-class merchantable grain. To 
convince flour buyers that they can continue to do so and that the 
flour resulting will be as good as it ever was is, under the present 
condition of doubt, the imperative duty of millers. My own assur- 
ances on this subject, given daily and as forcefully as I can present 
them, will, I hope, be followed up by some concerted plan of action 
calculated to restore confidence. 

INFLUENCE OF DURUM IN WHEAT TRADE. 

I have heretofore referred to the production of durum or macaroni 
Avheat in the United States as having an unfavorable effect upon our 
trade in flour. To understand this statement it is necessary to know 
that durum wheat produces flour of a character very different from 
that of the standard or high -class hard spring wheat grown in the 
Northwestern States, Minnesota, North and South Dakota. Its mar- 
ket value in the Northwest has been, for the past two years at least, 
10 cents or possibly 15 cents below the standard milling grades. In- 
deed,, at times it has been at 20 cents per bushel discount. Recently- 
on the London market No. 1 durum wheat sold at nearly 5 shillings 
per quarter under No. 1 Northern Duluth wheat, and at 7 shillings 
under Manitoba No. 1 Northern. This discount is equal to about 14 
cents per bushel in the one case and about 22 cents per bushel in the 
other. With durum so much lower in value in the United States 
than standard spring wheat, the flour dealers here are fearful that 
American millers will be tempted to mix in a very considerable per 
cent of durum, which they say would be fatal to the quality of the 
flour. They know that English millers actually do buy largely of 
this durum wheat, and without special injury, for everyone knoAvs 
that the coast miller in the United Kingdom always blends his wheat. 



UNITED KINGDOM. 21 

What is custom for the British miller would be suicidal for the 
American miller to attempt. The latter would lose the hold on the 
trade that certain Avell-known characteristics of his wheat impart to 
his flour. His flour must be distinctive as in previous years or it will 
not be wanted. 

APPREHENSION ABOUT BLENDING. 

But the fear that American flour will be blended with the flour of 
inferior Avheat is perhaps not the Avorst result of the production of 
durum wheat in America. As stated, the British miller is a blender 
of many varieties of Avheat, and necessarily so. Hence he is prepared 
by experience and scientific knoAvledge to use durum Avheat to good 
advantage to himself. He can buy it at so great a discount in price 
as to materially reduce his cost and generally to strengthen his posi- 
tion with the flour-buying trade. More than G,000,000 bushels of 
durum is knoAvn to have been marketed in Great Britain since last 
harvest, and some authorities place that quantity at even greater 
figures. At that it is sufficient to furnish the coast mills with 10 to 
15 per cent of their requirements of foreign wdieat and at a cost close 
to 20 cents per bushel below high-class varieties of hard spring. The 
American farmer is thus unwittingly a factor in the possible loAvering 
of the standard of flour made in his own country, Avhich has given his 
wheat a standing in all the markets of the world and made it more 
valuable by many cents per bushel than it could otherwise be, but he 
also makes it possible for the foreign competitor of the ^imerican mill 
to greatly undersell it and to disrupt the trade that it has taken years 
of effort to establish. Trade lost is not easily regained. In this con- 
serA^atiA^e country it can not in many instances be regained at all. 
Thus the miller, to reestablish himself or to increase his business, must 
face conditions not of his own making and quite beyond his ability 
to control. His recourse is to so thoroughly and persistently inform 
his possible buyers of such facts in the case as will appeal to them, 
and to so carefully guard the actual merit of his goods that in seeking 
their own best interest the buyers will be brought to him. 

RESTRICTIVE MEASURES SUGGESTED. 

Since durum wheat is now doubtless a well-established factor in the 
grain situation in the American North Avest, and may become more 
generally groAvn and extended to other sections, it would be well for 
the reputation of American flour if some restrictive measures could 
be taken regarding its use for mixing with other and better varieties 
of Avheat. Discounting the price 20 cents per bushel may not dis- 
courage its production, Avhile it certainly does help the foreign miller. 
The presence of durum Avheat is so much of a reflection on the Ameri- 
can miller that if he can influence public sentiment against its produc- 
tion he ought to do it. Failing in that, or pending its accomplish- 
ment, he should rigidly abstain from its use in the making of flour 
reputed to be of high-class quality. I would go so far as to recom- 
mend the formation of a commercial league of spring-wheat millers, 
who should bind themselves on the question of the character of wheat 
they used and publish the fact in a most convincing manner to their 
customers in London and elsewhere where hard spring-wheat flour 
has obtained a substantial foothold. I feel that the importance of the 
London market, with its large consumption of American hard-wheat 



22 TLOUR AND WHEAT TEADE. 

flours of both the spring and hard winter varieties presents the most 
promising field for increased trade m flours of that character, but 
the peculiar merits of each nnist be maintained. There is a gro\Ying 
fleld for both. It is esseiitial that neither should be contaniinated by 
anything that will reduce or change the standard quality. 

BAD BUSINESS METHODS. 

An analysis of the decline in the flour trade of American mills in 
the London market would be incomplete without further reference to 
the fifth reason in the list previously given. This pertains to the 
practices of the mills. While revealing many unfortunate, and in 
frequent instances very regrettable, cases of seeming neglect or in- 
tentional deception on the part of flour shippers, the situation is far 
from a hopeless one. It is important that due recognition be given 
to the errors of judgment and careless ways into which some mills 
have fallen in order that others now enjoying this trade and still 
others who may seek it may be warned and strengthened. The Lon- 
don trade should be cultivated carefully, for it presents the greatest 
possibilities in the United Kindgom for United States mills making 
hard- wheat flour. There is also a large volume of trade here for 
winter-wheat mills, though London may be said to be essentially a 
hard-wheat market. 

The standard package is a jute sack holding 140 pounds gross, 
and the grade of flour most in demand is a strong hard- wheat patent. 
Upon this word " patent " seems to hang many of the complaints that 
come to me. The term is mxuch abused. It ought to, and for many 
years did, mean the highest degree of excellence in flour. It has come 
to mean much less than this. . The laxity in this regard is so general 
as to have destroyed confidence, without which trade can not grow. 

EXAMPLES CITED OF BAD MANAGEMENT. 

One large user of flour, who buys from an importer, informed me 
that w^hereas a few years ago he bought no flour other than American, 
he now uses as much London-made flour as he does of that made in 
the United States. He further said that at present (June, 1908) he is 
in trouble over a large purchase of American spring wheat flour 
which w^as not up to standard by 3 shillings per sack, and that the 
mill had offered 1 shilling per sack discount. He will turn all his 
orders to English makes if he has another experience such as this 
with American flour. 

One Kansas mill has recently settled with the buyer a case that has 
been pending since early in February, 1908. Arbitration had to be re- 
sorted to, owing to the insistence of the mill that the flour was up to 
standard. The arbitrators found unanimously in March that the 
shipment, every bag of wdiich was tested, was off in quality and should 
be rejected. This placed the ownership of the flour Avith the mill, 
but the buyer had paid the draft upon it and therefore was out his 
money until the mill remitted. The buyer did not receive his remit- 
tance until June eS. The case was talked about and the details known 
to nearly everybody in the trade. It will be a standing reflection on 
American mill methods. It is peculiar, too, in that it exemplifies 
what some competitors are unkind enough to say have become the 



UNITED KINGDOM. 23 

characteristic traits of deals with American mills — i. e., delay in 
yhipping, long time en route, off grade on arrival, and refusal to 
settle. The flour bought early in October, 1907, was not shipped until 
the second week in November, did not arrive until the second week in 
February, was 80 cents per barrel off in qualit}^, and settlement was 
refused for over two months after arbitration. I would not have 
referred to this case if I had not been assured by many in the trade 
that it was not exceptional. 

Another case is cited to me of a lot of 1,000 bags the buyer has 
only recently disposed of. It was originally rejected on account of 
(Uiality and an allow^ance made. The buyer has had to carry this 
lot of flour for tw^o years. His trouble and loss have been out of all 
reason. 

In making this investigation I have possibly invited the narra- 
tion of complaints. I have asked for the reasons for falling off in 
purchases of American flour, and have been shown so many specific 
cases similar to the above that I know there is just ground for fault- 
finding. I believe the London importer and the buyers at second 
hand would rather have our flour than any other, but they are grad- 
ually drifting away because of so many cases of delay in transit and 
unfair and unbusinesslike treatment. Fortunately for American mill- 
ing interests there are many mills whose reputations have not been 
tainted by methods unbecoming to a gentleman, but even their trade, 
in a general way, has been injured. 

VALUE OF MILL BRANDS. 

The value of a mill brand stands out conspicuously amid the com- 
plaints I hear. I can not trace a single case of arbitration over qual- 
ity during the past year-— and there have been many^where a flour 
sold under the miirs own brand has been rejected. A regularly estab- 
lished mill brand, with the name of the State where made upon it, 
stands for the integrity of the miller who makes it. Many Atxieri- 
can millers recognize this fact, and so do the flour importers and 
buyers. Some mills have allowed the grade or quality of their flours 
under mill brands to deteriorate, but the change in grade has come 
with the coming of new crops, when changed conditions were ex- 
pected, and only the miller has suffered loss, and that by decreased 
business. The types as established from year to year by mills selling 
under mill brands have been generally maintained. The losses to im- 
porters and the arbitrations have been on flours under " wildcat," 
or unknown brands, or on buyers' brands. The general effect, how- 
ever, has been to greatly weaken the popularity once enjoyed by 
American flour. 

How to win back popularity in the quickest manner is now the 
problem. I would recommend that a new leaf be turned over with 
the advent of new Avlieat flour; that all shipments be exactly as rep- 
resented; that so far as possible all flour be sold under brands con- 
taining the mill name or the State where made, or the kind of wheat 
from which the flour was made. If distinctive marks are not adopted 
that will correctly describe the contents of the package there will con- 
tinue to be deception practiced, and millers, dealers, and bakers will 
all suffer loss. The millers in the final analysis will fare the worst. 



24 FLOUR AND WHEAT TEADE. 

STANDARD GRADES FALSE BRANDING. 

It would be wise to adopt and maintain standards for various 
grades. " Patent," " straight," and " clear," the distinctive types, 
should be well defined. Substantial and lasting trade can not be 
built up unless there is honesty in this respect. This, done by con- 
certed action of exporting mills and its genuineness very forcibly 
impressed on the minds of buyers, would in six months' time work a 
revolution in this market. 

False branding is a silly subterfuge that is akin to crime. Yet 
great quantities of American flour branded " patent," presumably 
the highest grade, when in reality the flour is a " clear," the medium 
grade, are annually shipped to London. Why so many millers imagine 
that they can long successfully market misbranded flour is beyond 
understanding. Of course the deception is discovered. The account 
is dropped, losses computed, and another trial with some other mill 
is made with possibly no better result. The offending mill adopts 
another brand, secures another agent, and the game goes on. The 
miller and the importer are both trying to do business along lines 
that have little in common to cement their interests. If the importer 
seeks other avenues of trade, or takes up the flour of Australia or 
Canada, it is because he has lost faith in American methods. Since 
the interests of the mill are best served when the best interests of the 
importer, mill agent, or buyer are carefully looked after, it is sur- 
prising that so many millers seem so negligent in this respect. 

IRREGULAR GRADING. 

Irregularity of grade is a common complaint and many samples 
I have seen justify it. The effect is demoralizing on the buyer. 
The blame is with the mill, and if discovered upon arrival the mill 
is the loser. The importer may make a profit where the mill has 
a loss. This would not happen if the miller were careful and had 
sold under his own brands. It works out this way : Under the rules 
applying to imported flour, a buyer may call for arbitration on 
account of irregularity. If the irregularity is conceded, the allow- 
ance is 3 pence (6 cents) per bag, which figures out 8 cents per barrel. 
If it be a 1,000-bag lot the arbitration award to the buyer amounts to 
$62.50. The cost of the arbitration is only $15 and the buyer has a 
net profit of $47.50. If the irregularity is not too great the buyer 
will be shrewd enough to work the flour off without any discount 
whatever. The fact that this scheme can be worked is one of the 
things that retains the buyer's interest in the mills operating under 
blind brands and producing irregular flours. It is practiced often 
enough to be interesting to the buyer and expensive to the miller. 
Under mill brands, where a studied effort on the miller's part is made 
to inspire the confidence of customers and build up permanent trade 
of value to the importer as well as to the miller, such advantages are 
not taken. Where trade is really valuable the distributer of the flour 
will be slow to take any risk oi losing his connection with the mill. 
Where the mill has nothing of value to be sustained in the way of 
reputation the receiver of the flour will take every legal advantage 
that shrewdness will suggest. 



UNITED KINGDOM. 25 

DISTRUST ENGENDERED. 

That false branding, the selling of something for that which it is 
not, is a cause of legitimate loss to buyers is beyond doubt. Further- 
more it demoralizes prices and standards, and is to be deplored from 
every point of view. This is true of varieties as well as grades. 
Flour made from Kansas wheat is constantly on the market under 
spring wheat brands. Some of it is made in Kansas and more of it 
is made in Minnesota, or in mills supposed to be making spring-wheat 
flour. Prices are disturbed because the Kansas wheat is lower priced 
than hard spring wheat of high grade. At present standard Kansas 
patents and well-known patents of spring wheat, having a reputa- 
tion made largely from Kansas wheat, have been selling for a long 
time at from 20 to 35 cents per barrel under flours known to be 
made from strictly all spring wheat. Thus prices have been kept 
disturbed, buyers unsettled, and a general feeling of distrust engen- 
dered. So great a difference in the prices of flour which the trade 
have been accustomed to think are substantially identical has been 
annoying and not productive of increased business. This is the view 
of importers who are at a loss to give satisfactory explanation to 
their customers. In the meantime the latter, not caring to take 
chances, have turned their orders to local mills, whose flour is daily 
before them and is delivered in small lots as wanted and on easy 
terms. The remedy for this is true branding and the establishment 
on the new crop of higher standards of quality. Let the competition 
be more on quality and less on price. 

The London market does not need to call upon America for blended 
flours. The local mills are better prepared to blend wheats and make 
better products from them than are the American mills. 

DISTINCTIVE TYPES WANTED. 

The field for our hard wheat mills is open for patents of a higher 
type than the home mills can possibly produce. American mills, on a 
full crop, will have the wheat to produce the desired goods. This 
and every other favorable condition should be taken advantage of 
and an effort made all along the line to build up quality. The price 
will follow the quality. This most important consideration I have 
given particular attention to. Millers who think the London mar- 
ket demands a " cheap for cheap " flour are making a mistake. It 
will pay the price and take larger quantities of the best than it is 
now taking of the reduced qualities. This is my opinion backed up 
by practically every flour importer here. But there must be a stand- 
ard established and maintained on a higher basis of quality than at 
present, and the whole scheme indorsed by such a concert of action 
as will inspire confidence. The mills must act together. They must 
combine on the matter of distinctive grades that shall be reliable and 
above reproach. How otherwise will the London buyer be made to 
feel that he will get what he expects ? He needs just such reassurance 
to inspire faith. Without it he will drift more and more to flours of 
medium quality, and the London and near-by mills will get the 
business. 

This concert of action and standardizing of grades must be no half- 
hearted affair. It must be backed by convincing demonstration by 
very capable people. The bakers must be shown anew that American 



26 FLOUR AXD WHEAT TBADE. 

flours are in reality superior to home-milled products. Then they 
will buy and can afford to pay the price, for they will make their 
owm blends, being justified in so doing by the quality the American 
mills can put in their flour if they will to do so. An educational 
campaign will be necessary, for niany bakers have gotten out of the 
way of blending their flours under the persuasive tactics of the local 
mills. The resourcefulness of the latter should not be underrated; 
it can be overcome by superior quality and proper demonstration. 

PREPAYMENT OF FREIGHT. 

Out of deference to the wishes and convenience of importers, 
American mills should cease the practice of prepaying the 
through rate of freight on flour. Formerly few mills ever pre- 
paid the freight. Latterly a very considerable number of them do 
so. A new burden is thus imposed upon the importer whose margin 
will not stand for it more than once, and the result is that he takes 
this into consideration when again making offers. There is really 
some ground for the importer's position. There is a loss entailed 
by the practice and in the end the miller has to pay it when accepting 
the reduced price. Prepaid freight is thought by some to contribute 
to the delays in transit on the theory that the railroad or the steam- 
ship company having received pay in advance is less anxious to 
perform the contract than if the remuneration were payable upon its 
completion. 

The gross value of 1,000 bags of flour, freight included, may be 
$3,500. The item of freight may be $400. If the freight is deducted 
from the mill's invoice and collectible of the importer on arrival of 
the lot, the draft drawn on the importer is $3,100. If the freight is 
prepaid, the draft is $3,500. The insurance on the lot is always 10 
per cent above the gross value, or, say, for $3,850. Should the ship- 
ment be lost in transit with the freight prepaid, the importer would 
realize on the transaction but $350 above the draft he paid. Should 
loss occur with the draft for the net after deducting freight, the im- 
porter, not then having to pay the freight, w^ould realize $750. Not 
many entire losses occur, but they happen occasionally, and the 
difference is sufficient to prejudice the importer against the practice 
of prepaying charges and drawing for the gross amount. More im- 
portant, however, is this matter to the importer when the long time 
in transit is considered. Drafts are drawn at sixty days' sight. 
They may be paid on first presentation, but must be paid at the 
expiration of sixty days. Suppose the flour is eighty or one hundred 
or one hundred and twenty days in transit; suppose also that the 
importer has 20, 40, or 100 such transactions in hand, with many of 
the shipments overdue. If he has had to pay the drafts with freight 
charges included, he has locked up anywhere from $8,000 to $40,000 
in freight charges that need not have been imposed upon him. His 
loss in interest is large. I heard of one case arising in this manner 
where a loss of nearly $2,000 was computed and claimed for. AYith 
the margin of freight in hand the importer's facilities for doing 
business would be materially increased and his losses incidental to 
broken packages and accidents en route would be lessened. In such 
large transactions as are passing the item of loss is considerable, and 
in the final summing up the price of American flour suffers or the 
loss is shifted to the miller. 



UNITED KINGDOM. 27 

ESSENTIALS TO SECURE TRADE. 

Our mills have such a natural advantage in the selection of high- 
class wheat that if they made the best use of their oj^portunities and 
the question of long time in transit could be solved, the London mills 
would simply " not be in it." The importers talk to me in a way 
they w^oulcl not talk to the mills they represent for fear of losing 
their accounts. They show me the evidence in the cases referred to 
and many others that it would be a w^aste of time to go into. 

We need a better understanding among the mills as to qualities 
and prices, and all the cooperation along those lines that the law^s 
will allow. Then we need to reform methods and weed out unde- 
sirable factors. But more than all, we need to send to this market 
uniformly a higher quality of goods, and this can be done beyond 
all question. Judicious advertising of this accomplishment as to 
quality, not by posters and circulars, but by actual representation 
and demonstration, is very necessary. In this work the importers 
would aid gladly and contribute liberally. Finally, we need to take 
lAeasures to shorten the time in transit. 

TRADE AT LIVERPOOL. 

GOOD OPPORTUNITY FOR AMERICANS TO REGAIN FLOUR TRADE. 

As freight rates on wheat from all the world's shipping points 
are slightly less to Liverpool than to any other British port it is 
quite natural that it should have attracted considerable capital to 
the construction and operation of flour mills. The industry in this 
respect has developed rapidly in the past ten years. Most marked 
has been the increase in milling capacity in the past six years. 
Liverpool is the best distributing point, all things considerecl, for 
Ireland and west of England territory combined, for flour and mill 
feed. The location of the world's surplus wheat supplies has in 
recent years favored Liverpool, and the mills located in and about 
this city have signally prospered. Their policy, as followed in recent 
years, of carrying large stocks of w^heat, has been, under prevailing 
conditions of gradually advancing values of both wheat and mill 
feeds, a very successful one for profit making. Generally speaking, 
the mills are thought to have accumulated large reserves out of their 
successful operations and the favoring conditions. The past ten or 
twelve months, however, are believed to have been a trying period, 
for competition has brought forth methods and practices that, if not 
actually productive of continual losses, w^ould be unsatisfpctory, not 
to say discouraging. These relate to sales methods, and all efforts to 
correct them have failed of accomplishment. 

GROWING COMPETITION FOR AMERICAN MILLS. 

It is encouraging to note that with the odds apparently against 
them growing greater from year to year American mills h?ve ncli^^ry 
put more flour into Liverpool in 1907 than in 1906, and that 1906 
showed a material gain over 1905. However, American flour for 
the past year shows only about half as much imported into Liver- 
pool as was brought in during 1902 or 1903, and only about one-third 
as much as came in on the yearly average from 1898 to 1901, inclusive. 
The statistics, as already given, do not tell the whole truth as to the 



28 FLOUR AND WHEAT TRADE. 

American situation, since the shipments of flom- from Canadian 
Atlantic ports are included with those from the United States. Just 
Avhat portion should be credited to the United States is a matter of 
doubt, and I am inclined to think the advantage may lie heavily with 
Canada. However, the point is that flour other than Liverpool pro- 
duction came here last year in spite of conditions of keenest compe- 
tition, such as were never before experienced among the local mills 
themselves, and came in sufficient volume and on its merits, to attract 
more than passing notice as compared with the three preceding years. 
The trade in foreign flour shows good growth under adverse condi- 
tions such as can not always be present, though it was decidedly under 
old-time records. The combined United States and Canadian ship- 
ments constitute 80 per cent of the foreign flour entering Liverpool. 
Since so large a per cent of the recorded Liverpool receipts of flour 
ultimately go to Ireland the figures are of little use as indicating the 
local conditions of consumption, except as demonstrating that the 
local mills are not maintaining the hold they naturally should have 
upon the trade. This is the main point to consider when the matter 
of encouragement to American mills is up for discussion. The field 
for American effort is still here and not likely to grow less. 



Liverpool's population within a 6-mile radius is fully 1,000,000. 
The flour trade naturally tributary, including ports of Ireland, and 
coming within the field of effort on the part of importers, probably 
concerns in excess of 3,000,000 population. The local mills reach out 
to a wider extent, covering much of the United Kingdom and ex- 
tending in both flour and feed to the northern European countries. 
Their capacity for manufacture is not far from 75,000 sacks of 280 
pounds each per week, which, if operating full time, would supply 
the needs of close to 4,000,000 people. While running stronger than 
has been the custom of American mills in recent years, the local mills 
have not done as much as their capacity would indicate, though most 
determined efforts on their part so to do have not been lacking. On 
the grades and qualities practical of production with the wheats 
they have to do with, milling is overdone in Liverpool. There are 
six milling concerns in the city proper of capacities ranging from 
5,000 to 12,000 sacks per week, aggregating 45,000 sacks weekly, or, 
say, 64,000 barrels. In Birkenhead, just across the Mersey Eiver, 
are two large and one smaller mill, totaling 30,000 sacks, or 43,000 
barrels weekly capacity. Seven miles up the Mersey, at EUsmere 
port, are two new mills built within the past three years, with a com- 
bined capacity of probably 5,000 sacks, or 7,000 barrels per week. 
Liverpool-owned mills, in North Lancashire, can make 7,000 barrels 
per week, and Chester and Wrexham, near-by points, each can produce 
nearly as much. Within 100 miles of these mills is a population of 
12,000,000 to 15,000,000 people, and there are many sm.aller mills 
and some larger ones, too, at various points in this most thickly set- 
tled region of England. The mills at the ports and, also, the ma- 
jority of the inland mills of large capacity, can get their imported 
wheat over the ship's side into small boats at a minimum of cost, 
and thence bv river or canal direct to their mill doors. These canals, 
aside from the Manchester Ship Canal, are controlled as to rates by 



UNITED KINGDOM. 29 

the railroads, but the saving in handling in bulk and direct from ship 
to mill is a distinct advantage. The use of home-grown wheat is 
considerable, but not large in proportion to output among the mills 
mentioned. The home crop goes mostly to the smaller mills at points 
more remote from the seaboard. 

HOME BAKING NOT GENERAL. 

The bread baking in and about Liverpool is in the hands of the 
bake shops, large and small, as distinguished from home baking. 
Shop bread and methods seem to suit the people better than baking 
the bread in their homes, though distribution by vans and carts is not 
general, as in some other sections of the Kingdom. The individual 
consumers go to the shops and markets for their bread to a very great 
extent. In Liverpool there are four large baking establishments 
comparing favorably with any in other cities, six others of large out- 
put, but not in the same class as the leading four, and then there are 
perhaps several hundred small bakeries with shops attached where 
10 to 30 sacks per week are made into bread. In the matter of organi- 
zation the Liverpool bakeries are easily in the lead, as evidenced by 
the high prices for bread which they have been able to maintain. 
They are known to be making money and to be very well satisfied 
with the existing order of things. They may well be so in view of 
the fact that the present retail prices, 7d. per loaf for the best bread 
and 6d. per loaf for the second quality, were established when Hour 
was 4s. a sack, or say 65 cents per barrel higher than it is now (July, 
1908). The prices given are equal to 14 and 12 cents, respectively, 
for the two qualities, and the loaves are supposed to weigh 4 pounds 
each. The scale was established nearly a year ago at the high point, 
and any considerable cutting of price has not been indulged in. 

The profit is so considerable that the competition among bakers 
in view of the restraint on price cutting is in quality, with the result 
that a greater percentage of high-class flour is used than is ordinarily 
the case. At first thought this would seem to be favorable to the local 
mills, who so largely supply and control this trade, but, owing to their 
excessive capacity and the prevailing methods of contracting for 
flour, it does not work out wholly to the advantage of the mills. The 
latter fix prices on the basis of their baker's blend, a second or third 
grade of their output. It so happens that Avhile mills' prices on this 
bakers' gTade may be very well maintained, the patents or higher 
grades may be bought and are in fact frequently offered at the same 
prices as the standard or price basis flour. Under such conditions 
Liverpool bread ought to be of most excellent quality. 

MEDIUM GRADES NOW UNSALABLE INFERIOR BREAD. 

Importers and millers are unable to market medium grades, soft 
winter wheat straights, Kansas and spring grades being now and 
for some time past quite unsalable. A^Tiiat American flour is sold 
is necessarily of the patent grades, but the entire quantity sold here 
does not represent more than possibly 8 per cent of the flour consumed 
locally. Yet with the local mills supplying practically the entire 
trade, and their highest grades going into the bread in greater ratio 
than usual, it must be remarked that the bread is decidedly inferior 
in color, texture, and taste to what an American would call a first- 
class loaf. This being the case, and I have found many to corroborate 



30 FLOUJEl AND WHEAT TRADE. 

my view in this respect, I think in quality alone American mills have 
an opening to demonstrate what they can do, equal almost to the field 
as they found it 3^ears ago. Where they have been handicapped has 
heretofore been dwelt upon in this report, and need only be referred 
to now to give emphasis to the facts that are most important. Trade 
has been lost largely because of good wheat available to the local 
mills when American mills had poor crops to contend Avith, slow and 
irregular transportation from America, a letting down in quality 
by a considerable number of mills so that lower prices could be made 
to attract trade, thus reflecting somewhat on the general reputation 
of American flour and furnishing arguments to salesmen of local 
mills who needed just such a basis to fortify themselves in their work 
of pushing home-milled goods. 

SHOULD SEND THE BEST AMERICAN FLOURS. 

In view of the pressure of competition, and notwithstanding the 
inherent excellence of well-made American flours, the best that our 
mills can make will be none too good to reestablish trade. It should 
be remembered that precedence has been assumed and claimed, and in 
cases demonstrated, at least to some large buyers, in the matter of 
quality by the British mills. Results as shown in the bread actually 
in the market do not justify the claims. But buyers are conservative, 
slow to change, and can be influenced only by something tangible. It 
is possible for American mills to make better flour than British mills. 
They should not fail to do this and should get their samples be- 
fore the trade as soon as practicable. The opening is for all three 
classes of American product in patent flour — soft winter and hard 
winter and hard spring. So little of any of these has been sold in 
Liverpool trade proper that they cut but little figure in local con- 
sumption, amounting, as it must, to much in excess of 1,000,000 bar- 
rels per year. The mills that can offer the highest qualities will, 
when once established, be able to command the price necessary to 
produce the quality. A high basis of quality once established will, if 
maintained, prove most effectual in holding buyers, and as a general 
advertising proposition it can not be improved upon, for the goods 
advertise themselves. The volume of trade possible is so large as to 
make extraordinary efforts worth while. 

Not only is Liverpool a promising field, but the many millions of 
consumers in central and northern England who do not now and 
never have used American flour, should be considered as a possible 
source of increased trade, should conditions continue to favor the 
crops of the United States and thus strengthen the American millers' 
position. If our millers do not- reach out after this trade, and Eng- 
lish mills are obliged to get their supplies to a considerable extent 
in the United States, a valuable opportunity will be neglected, for 
relatively our mills will have the advantage. Such British mills as 
might at any time be buyers of American wheat should, if possible, 
be induced to buy American flour. They can blend our flour as well 
as our wheat, and would, I th;nk, do so. If not, the Manchester 
Ship Canal offers exceptional facilities for delivery of cargoes of 
American flour into the very heart of England's most populous 
manufacturing districts. 



UNITED KINGDOM. 31 

FEW HOUSES IMPORT FLOUR ALONE LOW PRICES NECESSARY. 

Of the half-dozen importing houses in Liverpool, only three are 
now giving their undivided attention to flour. The others are more 
or less interested in the importation and sale of grain. All are 
equipped, however, for an active campaign for the increased sale of 
American flour whenever the conditions are right. 

After a careful study of the Liverpool situation I quite coincide 
with the views as expressed by the importers, that to start trade 
relatively low prices must be made and higher grades furnished. 
By higher grades I mean " short " patents as distinguished from 
"long" patents. The latter can not succeed here; and as to clears 
and extra fancies, they, too, should shoAv as much improvement as 
can be made. The clears made by British mills are very excellent 
ones, because the extraction of patent is small, and the rougher and 
low-grade portion of the flour is sold as feed. One importer who 
has dealt largely with American winter-wheat mills when they com- 
manded the bulk of the trade here, in commenting upon the grades 
advisable for this market, said that he felt sure he could build up a 
good trade on a 30 per cent winter patent and a 60 per cent winter 
clear (made on the basis of 30 barrels patent, GO barrels clear, and 10 
barrels low^ grade to the 100 barrels), whereas he could do nothing 
on patent and clear made with the percentages reversed, except to 
sell occasional lots of patent. A low clear can not be sold at all. 
He said a 30 per cent patent would sell more freely and command 
Is. 6d. to 2s. per sack more than a so-called CO per cent patent (which 
he feared was generally nearer TO per cent than 60 per cent) ; and 
for the 60 per cent clear he could get within 3s. per sack of the price 
of the 30 per cent patent and could find ready sale for it. 

SHORT PATENTS FACILITIES FOR DISTRIBUTION. 

Another importer who once handled hard spring flours largely 
and who is looking forw^ard to the time when he can do so again, 
urges that if the spring-wheat mills will be able to make " short " 
patents of very high quality the importers will get the price re- 
quired. He assures me that in his opinion a great opportunity is 
open for a large spring-wheat mill that will put upon the market an 
" old-style patent," as he terms it, even at 3s. above the present rela- 
tive values. Another urges the same statement as to hard winter- 
wheat flour. In fact, so many importers in other markets as w^ell 
as this talk along the same line of much higher grades that I can not 
do otherw^ise than give expression to what they say, especially since 
they assure me they believe they will be able in a short time to get an 
increased price. 

While the near-by population in and about Liverpool is 3,000,000 
or three times the population of the city and immediate suburbs, it 
should be remembered that the facilities for distribution at Liverpool 
put its importers in touch, when trade justifies, with customers with 
whom they have dealt in some cases for many years, over much of 
central and northern England containing, say, 15,000,000 people, as 
well as with almost every port in the United Kingdom. Tlie six 
importing concerns remaining to-day in the flour business in Liver- 
pool, out of a dozen or more formerly engaged, have every facility 
necessary for extending their business as occasion may require. Best 



32 FLOUE AND WHEAT TEADE. 

of all, they appear much interested in the effort now being made to 
extend the field of American flour abroad. 

FREIGHT ON BRAN TO HAMBURG. 

The ocean rate of freight on bran from the United States to Ham- 
burg and other north European points is favorable, as compared with 
the 10s. per ton rate from Liverpool to such points, considering the 
distance. Soft winter wheat bran or hard bran, if broad as the ordi- 
nary soft winter bran, would meet the German requirement, as I am 
informed, and it would seem advisable for American mills to culti- 
vate this trade. It is one of the means by which the British mills 
keep flour prices down in the United Kingdom, and through which 
they maintain high feed prices in their home trade. Taking the 
English flour and feed prices of a few years ago for comparison, they 
can make a relative cut of Is. per sack on flour by reason of the higher 
value of the offals. I am told that there is no German duty on bran. 
Whether there is or not, the demand is there and in Denmark and 
Sweden, and large quantities are being exported to these countries by 
Liverpool and other British millers. I hope American mills will get 
in line for the exportation of bran, either through their Liverpool 
representatives, some of whom are already doing large bran trade for 
the local mills, or through continental importing houses. 

ADVANCING PRICES AND CONTRACTS. 

A prevailing practice among many of the British mills on the eve 
of a price advance is to notify their agents of the same. The latter 
then fill out signed contracts for such quantities as they think their 
customers might be justified in buying, and send them out to all possi- 
ble buyers with the old price affixed. When the announcement of the 
advance is made, a dealer using 30 sacks per week may have on his 
desk mill contracts at his option to sign, for 500 to 700 sacks. He 
may not feel sure of the advance and may hold these contracts for a 
few days until the next advance is announced. Then he signs up and 
sends in as many as he thinks he can make hold with the mills. So 
keen is the competition for his trade that, so it is said, the mills gen- 
erally let the contracts stand. The buyer gets all the flour he wants 
at old prices if the market advances ; if flour declines, he does not have 
to take it until he is ready, and if it keeps declining he never is ready. 
Mills will not enforce the contract for fear of losing a good customer, 
in event of declining markets. Such methods bear heavily on import- 
ers who, to some extent, must meet the terms offered by the local mills. 

Under the terms of the contract offered buyers by the local and 
other British mills the former have the option of taking any grade 
at its relative price, the bakers' grade being the basis. Thus a mill 
can not know positively what flour will be wanted. Such terms the 
importers naturally can not offer, for they can not carry stocks of the 
various grades. 

LIVERPOOL TRADE NOTES. 

The local mills have, generally speaking, established 3 grades of 
flour — a very high grade patent, a second or medium patent, and a 
standard bakers' grade. The low grade is a negligible quantity, 
going mostly into feed. Prices are fixed on Tuesdays and Fridays, 
but apply only to the standard or bakers' grade. 



UNITED KINGDOM. 33 

British mills find a good market for bran in Denmark, Sweden, 
and Norway for dairy purposes during May, June, and July, when 
the demand here is slackest. By cultivating this European feed trade 
they are able to maintain prices at home at full $5 per ton higher than 
formerly. The ordinary — not the rolled — bran goes most generally 
into the continental ports. The freight rates from Liverpool to 
Copenhagen and Hamburg are 10s. (shilling=24i cents) per long 
ton, 2,240 pounds. 

I think a blend of Kansas hard and soft flours, made by such mills 
as have both wheats at hand, would meet a very considerable demand 
among such bakers as require a mild flour. There is an extensive 
field open to enterprise in this direction owing to the fact of so many 
bakers working on the short system of bread baking; preference 
would be given to such a patent in many cases. 

On the line of possible new trade an importer well known in Amer- 
ica suggested that if some large winter- wheat mill would undertake 
to establish a trade in Liverpool for household and pastry purposes 
such trade could be largely developed. Some money would have to 
be spent in letting the people know of the superior merit for home 
baking purposes, and the flour would have to be put up in T-pound 
packages, shipped in jute cases holding 280 pounds each. The im- 
porter believes in the feasibility of the suggestion. He thinks high- 
class soft winter patents most desirable for household use. 

TRADE AT MANCHESTER. 

VOLUME OF BUSINESS OPENING FOR AMERICAN MILLS. 

As American millers well know, very little flour made in the United 
States reaches Manchester and the very populous section of England 
lying to the north, east, and south of it. Just why this is so is under- 
stood by some, but the majority of millers are not fully informed. 
The subject has of course been written up by such milling journals as 
have labored to develop fields of outlet, and individual milling con- 
cerns have made attempts to establish themselves. Very little perma- 
nent trade has resulted. For various reasons neither importers nor 
millers have found the returns sufficient to justify further effort. 
Thus the situation is to-day that in American-made flour, while not 
an unknown quantity in and about Manchester, the volume of busi- 
ness is so small as to be scarcely worthy of consideration. This fact 
attracted my attention, and I have made such investigation of the sub- 
ject as seemed due so large a field for possible trade. Manchester and 
suburbs have a population of 800,000. Within 6 miles, including 
the city, there are nearly 1,500,000 people; within 10 miles over 
2,000,000; within 15 miles nearly 2,500,000; within 25 miles almost 
4,000,000 ; within 50 miles over 8,000,000, and in a radius of 75 miles 
over 12,000,000. 

SHIP CANAL AND FREIGHT RATES. 

Manchester is located 35 miles inland, but the ship canal, which has 
cost over $80,000,000 to build and equip, makes it as available as a 
port of entry for all ships under 600 feet in length as though it were 
on the coast. The dock terminals are as sufficient as future needs 
will require for many years, and as complete as money and modern 

2304—09 3 



34 FLOUR AND WHEAT TRADE. 

methods can make them. The traffic paying tolls the six months end- 
ing June 30, 1908, notwithstanding the general depression of business 
the world over, was 2,269,173 tons, equal to 378 ships of 6,000 tons 
each. These ships come with merchandise of every kind from almost 
every trading section of the world, but very few of them carry any 
American flour. Of wheat and other grains they bring in large quan- 
tities, and in this respect the traffic is growing from year to year. 
From 14,000 tons a few years ago the grain imports through the ship 
canal increased to 406,000 tons, or, say, 16,000,000 bushels, of wheat, 
corn, oats and barley last year. 

Grain is given advantages by the steamship people, and possibly 
by the canal people, not extended to flour, but I am assured by the 
traffic department of the canal company that all needed concessions 
as to rates and facilities, storage, etc., will be extended to flour once 
it becomes evident that by such fostering the business in flour may be 
developed. The needs of flour have not been given the thought or 
care that has resulted in the great expansion of the grain imports 
simply because it was believed there was no likelihood of flour ever 
proving an important factor. It was believed that American makes 
of flour were not suitable to the demands of the trade reached through 
Manchester. Some of the experimental shipments were not of the 
character with which bakers were familiar, and the home mills' com- 
petition being keen the efforts in most cases to establish American 
flours were given up as being unprofitable and not worth while. 
Since then the home mills have increased in number and size and 
have not allowed the unfavorable impression of American goods to 
grow less. Their own ends have been well served by the modern 
elevator facilities constructed by the ship canal company to care 
for its grain cargoes, and the fact that steamships' rates of grain 
have ruled about 3 cents per hundred lower on wheat than on flour. 

ENCOURAGEMENT TO FLOUR TRADE. 

The assurance of the canal people that they will not only direct 
their attention to adjusting their own charges to the reasonable en- 
couragement of flour imports, but that they will also use their best 
endeavors to secure as favorable through rates on flour as on wheat, 
brightens up the prospect to a point where American millers may 
see some hope for business. These assurances, made to me personally 
and confirmed by mail, open up the way for importers, millers, and 
the ship canal company to get together, which of course can only 
be done by millers and importers taking up the subject in an earnest 
manner with the company. The latter has facilities for overcom- 
ing much in the matter of handling and storage charges that have 
to a great extent been a bar to trade. In this connection I may say 
that through rates are available from American Atlantic and Gulf 
ports to almost any interior town and city in central and northern 
England via Manchester for distribution at that port in lots of 4 
tons and over, by which the canal tolls are reduced to one shilling 
and six pence (36 cents) per ton instead of three shillings (73 cents) 
as computed in the ocean rate. 

Not to go into details at this time I may say that the through rates 
will include ship canal tolls, conveyance by rail from alongside ship, 
transit or warehouse in the Manchester docks to destination, and 
delivery there within ordinary limits. The proposition of the canal 



tJNITED KINGDOM. 35 

company in respect to flour, is, in short, to treat it as favorably as 
grain is now treated for interior distribution. The company is ap- 
parently willing to try out, by such fostering means as are in its 
power, the question of enabling the people to use American flour, 
and I hope that such American mills as can produce the kind of flour 
needed in this section will avail themselves of the opportunity offered. 

CHARACTER OF FLOUR REQUIRED. 

All this section of England is traversed by canals connecting with 
the Mersey River at Liverpool or at Manchester via the ship canal 
or other ports by means of Avhich the flour mills at interior points 
are supplied with such imported wheat as is needed to mix w4th 
home-grown wheat. The foreign wheats in most favor on the past 
year's crop are Argentines and Oregons. Another crop harvest may 
favor India, Australia, or Russia. 

The local mills supplying this section of England make blended 
flour of whatever wheats are best available. The Manchester mills 
are in most part modern. That of the Co-operative Wholesale So- 
ciety is the largest, with 7,000 sacks (10,000 barrels) Aveekly capacity. 
The others are much smaller. 

OPENING FOR AMERICAN MILLS. 

Since the consumers have not for many years used other than 
blended flours to any extent, it would be labor wasted to try to edu- 
cate them to anything else. This seems to be the opinion of those 
in the trade. It is certain that hard spring wheat flour and soft 
winter wheat flour, when introduced some years ago, were in each 
case so unlike what the people were accustomed to that no trade of 
consequence was built up. The hard spring patents were too strong 
and the soft winters were not strong enough. The bakers in almost 
every case employ the short system in baking and will not take the 
trouble to blend flours themselves. In fact they are not prepared 
to blend the hard and soft flours, never having had to do so, and 
machinery for the purpose would have to be introduced if other than 
blended flours are to be successfully sold here. 

For the present I think the field about Manchester is open to such 
American mills as are so located as to obtain on the most favorable 
basis both hard and soft wheats from which to produce first-class long 
patents of good color with strength exceeding the soft winter wheats, 
and of better color but less strength than Kansas hard wheats. I 
believe that two good 90 per cent patents of soft and hard winter 
wheats, blended in the ratio of 40 barrels of hard to 60 barrels of sof I 
and properly bleached (not too much) would fill the bill for the trade 
under consideration as well as a large part of the possible trade in 
and about Liverpool. Mills that are prepared to make such blends or 
to make similar blends of hard spring and soft winter when prices 
justify could surely obtain a foothold and ultimately a large trade 
about the Manchester and Liverpool market, but they must ahvays 
bear in mind that the flours must be as absolutely uniform and un- 
varying as human care and skill can make them. The buyers must 
in no way be disappointed, for once displeased they will not take hold 
for the second time. The importers who are ready to undertake the 
work of establishing such flours as, in the estimation of buyers, will 
fill the requirement after the manner of home-milled flour, can not 



36 FLOUR AND WHEAT TEADE. 

afford to take chances, and assurance should be given them upon this 
most important point of uniformity. 

OPPORTUNITY FOR TRADE IN BLENDED FLOUR. 

Heretofore I have not felt like recommending American mills to 
try to build up trade in the United Kingdom on blended flour, but 
after going into the conditions at Liverpool and Manchester I feel 
sure there is splendid opportunity for trade in this kind of flour in 
both those large centers of population. I feel that the case is quite 
different in London and the Scotch markets, though the tendency is 
more and more to use mill-blended flours even there, for such flour 
is most generally made and extensively advertised by British mills. 
In respect to the kind of flour most suitable, the prevailing methods 
of baking in the various markets give the key to the situation. In 
Manchester and Liverpool the bakers with small shops, of which 
there are large numbers, have so thoroughly established themselves 
on blended flours that they could not be easily induced to change. In 
London and in Glasgow, and in other points in Scotland, the conver- 
sion to blended flours is by no means complete, so that flours having 
the distinctive characteristics of hard wheat and soft wheat are in 
demand and will be required in large volume. 

TRADE IN IRELAND. 

POPULAR TASTES AND DE^IANDS SUPPLIES FROM AMERICAN MILLS. 

The flour trade of Ireland presents an aspect materially different 
from that of the remainder of the United Kingdom. Whereas Eng- 
land, Scotland, and Wales require the products of hard wheats in 
preference to those of soft or winter wheats in the ratio of two-thirds 
to one-third, the situation in Ireland is exactly reversed in respect to 
the flours consumed. Soft wheat flours have always had the prefer- 
ence in Ireland. A few years ago fully three-fourths of the flour sold 
in Ireland was made from soft wheats. To-day soft wheat flour 
represents about two-thirds of the consumption. There is no doubt 
but that hard wheat is slowly gaining in favor, this being brought 
about by the growing influence of the large bakeries at the more im- 
portant centers of population. These are increasing year by 3^ear in 
size and number. Some of them use hard and soft flours in about 
equal portions, Avhile the majority mix in a larger percentage of hard 
wheat flour. Home baking in Ireland, still the larger factor in con- 
sumption, is exclusiveh^ in soft wheat product. The inroads made 
as against home-baked bread by the baking companies have been 
very marked in recent years, but it will be many years before any- 
thing like a general substitution of bake-shop bread will come to pass 
in the rural districts. It ma}'', therefore, be concluded that for a 
long period in the future, winter or soft wheat flour will constitute 
the favorite breadstuff with the majority of Irish consumers. The 
change noted has taken place in the cities and territory adjacent 
thereto. 

Ireland's population is somewhere about 4,000,000, or possibly 
4,500,000. Authorities seem to differ in the absence of any recent 
enumeration, and the tendency seems to be toward a decrease in 
numbers from year to year. Notwithstanding the lack of prosperity 
and absolute poverty in many sections of Ireland, only the very best 



UNITED KINGDOM. 37 

bread obtainable is wanted for food. Second grades of flour, or 
inferior makes of bread, can not be sold. This peculiarity applies 
to other food products in Ireland as well as to bread. The best 
seems none too good, no matter what the surrounding conditions may 
be as to wealth or poverty. 

SUPPLIES FROM AMERICAN MILLS. 

For many years American mills supplied by far the greater part of 
Ireland's requirement of flour. It is doubtful if over half is now 
American product. This seems to be the consensus of opinion among 
the importers, while the Irish and English mills are seemingly de- 
termined to drive out the American product, regardless of the cost 
of so doing. It looks as though the progress the latter have made is 
not permanent. The gain in the Irish trade of British mills has been 
made under conditions that have happened to specially favor them. 
It has been maintained at the expense of profits at a time when wheat 
supplies were more nicely adjusted to the benefit of British mills 
than they ever were before, or are likely to be again for any continued 
period of time. British mills have undoubtedly lost money heavily 
in the Irish trade the past twelve months. Expensive sales methods, 
cut prices, and secret rebates have been indulged in to such an ex- 
tent as to be disheartening, if very good evidence on this score can be 
relied upon in the shape of expressions of millers themselves. The 
game has not been worth the cost, for the real competition is between 
the British mills themselves and not against American mill prices. 
Of course, American flour has suffered in that trade and has not in- 
creased as it otherwise might have done, but on the Avhole more flour 
from America has probably found its way into Ireland in 1907 than 
in 1906. 

CONSUMPTION AND DISTRIBUTION AT BELFAST. 

The city of Belfast has a population of 400,000, largely engaged in 
manufacturing pursuits and shipbuilding. It is doubtless the most 
prosperous community in Ireland, and being a first-class port, with 
splendid dock facilities and railroad connections, is in a position to 
supply the needs of many more than its own inhabitants. It is 
thought that fully 1,500,000 people, constituting the northern one-third 
of Ireland, obtain their flour requirements through the medium of 
the flour importers and millers, directly or indirectly, of the port of 
Belfast. Of the importations of flour, the Belfast importers handle 
two-thirds, while importing houses of Glasgow, Liverpool, and some 
other ports handle the remaining one-third. 

A few years ago home baking took two-thirds of the flour used in 
Belfast and immediate vicinity. Now more than four-fifths of the 
bread used is provided by the large baking companies. Of these 
there are close to 15 that may be termed large producers of bread. 
One of them bakes from 1,250 to 1,500 sacks of flour of 280 pounds 
each per week, and a second shop is nearly as great in capacity and 
output. The advent of the drawplate oven and improved machinery 
generally has worked a revolution in the kind of bread used in the 
city and large town districts. Belfast bread carts may now be seen 
daily in the lanes and byways throughout the greater part of the 
north of Ireland. The large bakeries, already in pos es>ion of the 
city and large town trade, are extending to and securing a foothold 



38 FLOUE AND WHEAT TRADE. 

in the small towns and hamlets. As the country baker dies off there 
is none to take his place, and his remaining customers find their 
wants are readily supplied with the excellent product of the city 
shops. It is only the rural community, remote from the towns but 
constituting fully one-half the population, that adheres to home-baked 
bread. 

KIND or BREAD REQUIRED. 

In Ireland this particular style of bread is in a class by itself. It 
is baked without yeast, and its preparation is a matter of only a few 
minutes. Soft-wheat flours only can be used. The needed leavening 
is furnished by a mixture of ordinary baking soda with sour milk, 
to which the flour is quickly added and the loaf formed by hand. 
This is then put into a covered kettle and placed over a hot fire of 
peat with the burning fuel kept piled up around it until the baking 
is complete. The result is a light, sweet loaf, very palatable and 
nutritious. If the flour is too strong the moisture is too quickl}^ 
absorbed, and the bread is too dry and apt to crumble. If too weak 
and soft, the bread is soggy. As the home baking is mostly done 
" by rule of thumb," it follows that once familiar and suited with a 
flour, the housewife may not meet with good success with flour need- 
ing different treatment from that to which she is accustomed. Thus 
a really good flour may be rejected as worthless simply because it was 
not understood. Hence the difficulty flour dealers meet with in the 
introduction of flours whose characteristics are different from those 
to which the people are wedded by habit. Winter- wheat flour suited 
the people years ago and it suits them to-day. Moreover, their habits 
have not changed, nor has their education increased sufficiently to 
justify any effort to change their habits if such were desirable. As 
long as the rural class makes its own bread it will require winter or 
soft-wheat flour. 

HOW AMERICAN FLOUR WAS DISPLACED. 

It happened in 1904 that the winter wheat crop in the United 
States was deficient. The flour was not like it had been in previous 
years, and the Irish farmer's wife could not, or did not, get the bread 
results she was accustomed to. The American spring wheat crop that 
year was also off in quality, and the large bakeries turned to other 
makes of hard-wheat flours. While the Belfast importers and those 
of other ports in Ireland were thus disturbed in their American trade 
relations, the same condition prevailed throughout the United King- 
dom wherever American flour was used, though perhaps not to the 
extent manifest in Ireland. Thus a most favorable opportunity was 
given to the Irish, English, and Scotch flour millers to displace the 
American product. New and enlarged mills in Ireland pushed their 
goods into Irish stores and bakeries that had scarcely known them be- 
fore, and English mills were enlarged and built up to secure the sud- 
denly developed domestic trade. The millers seeking trade in Ire- 
land were fortunate in securing just the right wheat and imparting 
the needed characteristics to their flour to meet the peculiar demand 
of the Irish rural trade. These mills used the white or blue stem 
wheats of the United States Pacific coast, or the white Australian or 
Indian wheats. Such varieties happened at that time to be in plen- 
tiful supply, and have so continued up to a recent date. These white 



UNITED KINGDOM. 39 

wheats yield a flour which in its natural condition produces a yellow 
dough far less satisfactory than the white flour from American No. 
2 red wdieat. It must be borne in mind that the Irish buyer does not 
buy flour by sample. He cares nothing for samples. He demands of 
the miller or importer a flour that will suit his trade, and he is not 
easily influenced to place additional orders if the goods have at any 
time failed to please. The farmer's wife must have none but that 
wdiich will make the largest loaf and whitest bread. So the Irish 
and English millers, seeking this trade when American millers were 
having trouble with an inferior crop of wheat, resorted to the prac- 
tice of bleaching the yellow^ flour made from the white wheats of the 
Pacific and Australia. They used chemicals and electricity to pro- 
duce the gas that w^ould bleach to a dead white the yellow flour they 
made. The wheat they used was otherwise of a kind to suit the case, 
and the matter of color overcome, they soon had a foothold where 
before they had done little business. 

THE BLEACHING PROCESS. 

It may be remarked that necessity in this, as in other cases, was at 
the bottom of the bleaching of flour, and the process came into being 
because it was the one thing needful, and in Belfast the only prac- 
ticable bleaching method to be applied to flour was first introduced 
and used and patented. This much is claimed by the largest milling 
concern in Belfast, whose name ("Andrews Process ") the basic 
patent, so claimed, now bears. Following the lead of the Andrews 
mill in flour bleaching, other British mills adopted the process. 
Thus, with the white wdieats at their command and the bleached 
flour fairly satisfactory, by cutting prices until they have no profit 
left, the Irish and English mills are now so well established in the 
Irish rural trade, and to some extent in the city baking trade, that 
American mills must face a serious problem in regaining what trade 
has been lost. Notwithstanding the claims of British mills as to their 
opportunity of selection of wheats from all parts of the world, the 
cause is weakened when, for any reason, there is a scarcity of any 
needed standard variety. A failure to secure white wheat at low 
prices will lose the Irish rural trade to British mills. It is this 
knowledge that keeps the Irish importers of American flour faithful 
and hopeful. 

IMPORTS AND HOME PRODUCTION. 

Of Belfast's imports of foreign flour, about 95 per cent comes from 
the United States. So far as the north of Ireland is concerned, the 
flours of Germany and France need not be regarded as factors in the 
supply. The competition, though actually between the Irish mills 
and the English mills, is carried on with such intensity as to tend 
toward displacing foreign flour of every make. The Irish Industrial 
Development Association, which claims to keep a watchful eye on 
Irish industrial affairs, is very active in keeping alive a sentiment 
favoring Irish products of every kind, almost proceeding to coercion 
or boycotting, in extreme cases, to carry its ends. Things English 
as well as things American come under the ban of this association, 
but if any favor is shown a foreign product, American flour is likely 
to fare better than the English product. 



40 . FLOUR AND WHEAT TEADE. 

There are four modern mills in Belfast, with an aggregate capacity 
of 2,400 barrels per day, and three other mills in the north of Ireland, 
one each at Ballymena, Newry, and Londonderry, with a combined 
capacity of 800 barrels daily. These mills operate, it is generally 
believed, to about Y5 per cent of their capacity, the largest mills op- 
erating nearly full time the past few years. 

CONDITIONS AT DUBLIN. 

Whatever has been said above in general terms as to the Irish trade 
regarding the north of Ireland and Belfast, applies equally well as 
to Dublin and the south two-thirds of the island. The people of the 
two sections differ in religion and in degrees of prosperity, but their 
household habits as to breadstuffs are identical. The same kind of 
flour suits both sections. Methods of distribution are much the same. 
The population of Dublin is less than Belfast, being placed at 350,- 
000, but Dublin being more centrally located, and being the seat of 
government, may be said to have some natural advantages as a dis- 
tributing point. Her importers, like those of Belfast, are reaching 
out over the entire island, but find competition of the English and 
local mills very severe at all coast points, and in the south of Ireland 
particularly. There is really only one importing house located in 
Dublin distinctively claiming that city as its home, but many other 
importing houses of Belfast, Liverpool, Glasgow, and London have 
branches or agencies in Dublin from which their traveling men for 
Ireland are handled. While much of Belfast's receipts of American 
flour reach that city by direct steamer, more of Dublin's imports go 
by way of Liverpool, though direct sailings are made from America 
to Dublin. The route via Liverpool is chosen so that large consign- 
ments may be broken up at that port and distributed to various 
south and west of Ireland ports in smaller quantities. Thus the re- 
quirements of parcels of flour, whether designed for Dublin, Cork, 
Limerick, Waterford, Sligo, Tralee, and many other small cities, can 
be conveniently handled via Liverpool for transshipment by coast- 
wise steamers. The buying may be credited to Dublin and the 
original shipment to Liverpool, neither of which cities may be a 
factor in the actual consumption. 

CONSUMPTION or AMERICAN FLOUR. 

Full 80 per cent of all the flour actually consumed in the city of 
Dublin is made in the United States. Canada may supply 5 per cent 
and the local mills the balance. Not much English-made flour is 
used in Dublin. In the outlying districts and throughout the south 
and central and western Ireland the local and English mills have 
two-thirds or more of the trade. There are many small mills scat- 
tered through the southern half of Ireland, the wheat raised in that 
section being fairly good for milling purposes. However, but little 
can be said in favor of Irish wheat. The climate is not calculated 
for any increased production of Avheat or cereal crops. Only that 
part of Ireland constituting the south half can mature wheat so that 
flour can be made from it. The wheat grown in the north half is 
soft and spongy and fit for feed purposes only. Thus the more pre- 
tentious mills at Dublin, Limerick, and other central and southern 
points must use foreign-grown wheat, and the white wheats of the 
United States Pacific States, and that of India and Australia are 
largely drawn upon. 



UNITED KINGDOM. 41 

The quantity of American flour imported is about equally hard 
wheat and soft winter wheat flour for the Dublin trade proper. In 
the country trade it is practically all soft winter. These shipments 
come in both cotton and jute sacks of sizes from 98 pounds to 140 
pounds and 280 pounds. For the country trade the 98-pound cotton 
sack is preferred. In this style package the United States Pacific 
coast mills in previous years have shipped to Dublin considerable 
quantities, but I can learn of but two or three cargoes, of possibl^^ 
50,000 bags each, reaching Dublin from the Pacific coast the past 
season. This is a white wheat " patent " bleached, and goes into the 
country retail trade. 

There are six milling concerns in Dublin, the largest making about 
15 sacks per hour, say 500 barrels per day. The other five will aver- 
age in daily output each about half this quantity. Two of the largest 
Dublin mills have bakeries in connection with their milling business, 
using considerable of their OAvn product, but using also very respect- 
able quantities of American flour, mostly of hard wheats for blending. 
One of these uses as much as 1,700 barrels of flour per week. 

WHITE AVHEAT BRAN. 

An advantage the British and Irish millers have is in the high 
prices the Irish farmers are willing to pay for white wheat bran as 
compared w^ith that from red wheat. This has led to special prepa- 
ration by steaming and rolling finished bran so it will be exceedingly 
flaky and broad. No such bran is seen in the United States. Bleach- 
ing of bran is also resorted to to make it pleasing to the Irish feeder. 
The broad, white bran will at any time command a price equal to $10 
a ton more than the ordinary red-wheat bran. This fancy white 
bran is shipped in second-hand 280-pouncl flour sacks, or packages 
similar in size, containing about 140 pounds of bran loosely packed 
and sewed. The ^' Pollard " is what American millers would call 
finished middlings, except that most of the low-gTade flour is disposed 
of by mixing it with this feed, which is consequently very rich. 
Much flour, too, is left on the bran. If Ameiican mills would spe- 
cialize on feeds and make just what the Irish trade requires, they 
would have the means of dej^riving the British miller of the strong- 
est weapon he has in making prices, i. e., his high value in feed. It 
would seem that $35 per ton, which has been the current price in 
Ireland, would justify experiments by our mills. But the bran must 
be bleached till it is white and steamed and rolled until ver}^ broad. 

IRISH TRADE NOTES. 

Cardiff and Liverpool mills employ or own small coasting steamers 
to transport their flour and mill feed to Irish ports, having agencies 
for distribution to the interior villages. They thus cover an extensive 
territory, carrying their customers on open account, but obtaining 
higher prices for both flour and feed by several shillings than Ameri- 
can flour in round lots. They have made little impression in Dublin, 
but at country points and in the smaller milling centers they have 
forced issues with the local mills, to thegreat discomfort of the latter. 

I am informed that the use of " blind " brands is very common in 
Ireland, and that a reliable dealer buying of British mills can have 
the words " winter wheat," or almost any device he may require, 
placed upon his sacks of flour. Some sort of cooperation with the 



42 FLOUR AND WHEAT TRADE. 

Irish Industrial Development Association, which is very jealous of 
Irish interests, might result in the enforcement of the " Merchandise 
Marks Act " which forbids false branding. 

Cork, a city of 100,000 population, is supplied with imported flour, 
mostly by way of Liverpool. Limerick has large mills (as the word 
is used in Ireland), and their trade is extended over most of central 
and south portions. The population of Limerick is 46,000. Water- 
ford is credited with a population of 26,000, while Wexford, Tralee, 
and Sligo are 10,000 to 11,000 each. 

In order to compete with the prices and qualities offered by British 
mills to Irish buyers, and to reestablish trade to the full extent possi- 
ble, American mills would have to be in shape to make landed terms 
a full shilling per sack under British quotations. Some inducement 
on price, and if possible some on quality, would have to be made now 
that the competition has reached the point it has. With crops and 
prices favoring America^ from now on the way may be clear. 

TRADE IN SCOTLAND. 

PECULIARITIES AND REQUIREMENTS OF THE MARKET AT GLASGOW. 

The city of Glasgow has a population slightly in excess of 1,000,- 
000, including the immediate suburbs. The importing merchants in 
flour and the local mills supply a population of probably three times 
that number of people, their territory covering the more densely pop- 
ulated western section of Scotland, including the very extensive coal- 
mining regions. It is believed that no section of the United King- 
dom requires more bread per individual than the portion tributary 
to Glasgow. The statistics seem to bear out an annual consumption 
equal to 7 bushels of wheat per capita, or nearly one-half more than 
the rate in the United States. 

The milling industry of Glasgow consists of 6 large concerns of 
varying capacity, but sufficient to have produced in 1907 approxi- 
mately 1,400,000 barrels of flour. They make slightly in excess of 
one-third the requirement. All are said to be very prosperous. The 
consumption of wheat by these mills in 1907 was not far from 6,000,- 
000 bushels, this being a full 1,000,000 bushels more than the average 
for the previous four years, as indicated by the published reports. 

IMPORTS PROM AMERICA. 

The importation of flour, while showing less in 1907 than in 1906, 
exceeded somewhat the years 1905 and 1904, but was less by 350,000 
sacks or, say 500,000 barrels, than the average of the six-year period 
from 1898 to 1904. The amount imported in 1907 was 1,581,894 
sacks of 280 pounds each. Of this amount, the United States and 
Canada supplied 1,126,000 sacks. What portion of this is properly 
accreditable to Canada the available statistics do not show. It is 
probably several hundred thousand sacks. Much of the Canadian 
flour comes through New York, Portland, and other American ports, 
while a great deal of American flour is exported by way of Montreal 
and St. Johns. Not much Australian flour reaches Glasgow, but con- 
siderable quantities of French and Hungarian flour find a market 
here. For many years Glasgow has been a good outlet for the higher 
products of Hungarian mills. At present imports from Hungary 
are exceedingly light, the price of the highest grades being 10 shil- 



UNITED KINGDOM. 43 

lings per sack ($1.65 per barrel) above American bard winters, and 
about 7 shillings per sack above the best Liverpool patents, which are 
said to be taking the place of Hungarians. 

FANCY GKADES FROM GERMANY. 

Of late German flours of very fancy grade, " short patents " evi- 
dently, are coming in considerable quantities, under the stimulation 
of the rebate system of the German Government. Some samples I 
have just seen appear to closely match the favorite Hungarians in 
quality, at 10 or 11 shillings per sack under them in price. The 
character of these high-class German patents is similar to our best 
soft winter-wheat goods now found on this market, except tliat they 
are of a higher grade, clean, bright, and very strong. Without know- 
ing positively, for there is no means of positive information, I would 
say that the German flours now sampling on this market are 40 per 
cent patents at 27 shillings 6 pence c. i. f., and 50 per cent clears at 
about 2 shillings and 6 pence less. They are certainly better in 
quality by considerable than well-known Ohio and Indiana patents 
and clears that can be bought at 26J and 24 shillings, respectively. 
It is not so much the price that is selling these German flours, as the 
exceptionally low price for the quality and the quick time of delivery. 

HIGHER AMERICAN QUALITIES NEEDED. 

I am positive that the United States has the facilities for making 
equally good goods and that, with equal quality assured, our soft- 
winter- wheat mills would have the preference with the trade at the 
same price. I am more and more impressed with the belief that 
higher quality would be more sought after in American flours if it 
were furnished in more abundance. As it now appears the matter 
of quality varies so in the flours from America that the general 
conception of our standard of excellence is not high enough to at- 
tract. I believe that 1 or 2 shillings more per sack could be obtained 
by American makers of soft-wheat flours if they would raise the 
quality of their " patents " and " extra fancies " accordingly, and 
that then they would do more business with Glasgow^ buyers than 
they can hope to do on present standards. The real competition is 
on quality, and will be sharper as the Liverpool and German mills 
get more foothold in this and the Irish markets. 

GOOD MARKET FOR HARD-WHEAT FLOURS. 

While Glasgow is one of the best markets, probably now the best, 
for soft-w^heat flours of American make, it consumes far larger quan- 
tities of hard- wheat flours. Fully 75 per cent of all the flour used 
in and about Glasgow is hard-wheat product. Formerl}^ spring- 
wheat mills had 90 per cent of the import requirements of this trade. 
Now hard winter- wheat flour of the Kansas variety has much more 
than half of it, with the local mills second, and the spring- wheat mills 
doing a comparatively small business. The local mills grind mostly 
hard wheat — largely that of Argentina, with large quantities of 
Nos. 2, 3, and 4 Manitoba hard spring. The latter, though some- 
what frosted, gives the needed strength. Where the short system 
of baking is in use these flours are at present satisfactory at 28 to 30 
shillings per pack delivered. Where the long or Parisian barm 
method prevails (and this is most generally in use with bakers) the 



44 FLOUR AKD WHEAT TRADE. 

strong " Minnesotas," so called, are an absolute necessity. But not 
as much of this quality of flour is now used as would be the case if 
its strength were greater, even if the price were higher. The bakers 
can manage to get along by using either hard winter or local flour 
with the " Minnesotas," even in the long system of baking, but their 
yield of bread is less than it would be if more and stronger qualities 
of hard spring were used. 

PREFERENCE OF THE BAKERS. 

The short patents produced by Kansas mills seem to be in demand 
along with the best of the hard springs. The long Kansas patents 
and the spring patents made with hard-winter mixtures serve the 
purpose with short-system bakers, but in general do not excite inter- 
est because of their irregularity of quality as between mills, and 
hence even at higher prices the local mills get the preference. With 
them the baker knows just what he will get and when he will get it. 
I can see that standards adopted by our mills applying to hard 
spring and hard winter would encourage much trade and would be 
w^elcomed by the importers who now have trouble to maintain them- 
selves with the bakers, because the flour they get from various mills 
is not uniform. Often it is not regular from the same mill. With 
few exceptions no one mill in America seems able to supply the trade 
of any one importer — at least the latter most generally seem to have 
several American connections. The bakers do not concentrate their 
trade, and hence there is a constant " shopping around " w^hen buying 
is active. The importers, or many of them, have of late taken on 
accounts of the local mills, and some are financially interested in mills 
here and at other United Kingdom points. They say they have been 
forced to thus divide their interests. How much of the incentive for 
so doing comes from necessity is not clear. If American grades were 
more dependable, there would not have arisen the need for division 
of effort and interest, for the importers are, after all, more closely 
related to the American mills than they can ever become to the mills 
here. The latter, once they get to a point where they can supply the 
bakers in full, will have little use for the importers. By overcoming 
delays in transit and irregular arrivals, and by fixing standards that 
Avill be recognized — and that on the highest practicable basis — the 
mills of the United States will greatly increase their business here. 

COMPETITION OF BRITISH MILLS. 

It must be borne in mind that the last few years have worked great 
changes. New British mills of high efficiency, new sources of wheat 
supply, a growing sentiment favoring home industry — these all enter 
into the proposition and must be duly considered by American mills 
interested in this market. The customs and prejudices of the people 
have changed with the altered conditions, and our millers must take 
measures to fortify themselves and their representatives here against 
the inroads sure to follow such changes. If I speak plainly as to 
qualities and methods, it is only to admonish our millers to the needs 
as I see them. The situation here calls for the recommendations 
already made as to higher qualities of product and their standard- 
ization, and then for a thorough, well-directed advertisement to the 
buyers and their customers regarding what is done in this respect. 



UNITED KINGDOM. 45 

EASTERN SCOTLAND AMERICAN SALES MAY BE EXTENDED. 

The eastern half of Scotland gets its flour supplies through the 
mills and merchants of Leith, Edinburgh, Dundee, and Aberdeen. 
Aside from Glasgow there are many towns of from 5,000 to 30,000 
inhabitants. In round numbers a population of probably 1,500,000, 
certainly over 1,200,000, looks to the above-named four cities for the 
greater part of its needs in breadstuffs. The energy of the Glasgow 
merchants, dominating, as that city does, the western two-thirds of 
Scotland, has reached into the eastern third and secured footholds for 
t\ very considerable part of the trade naturally inclined to Leith, 
Dundee, and Aberdeen. This competition and that of the flour mills 
at L^th have in large measure cut down the possibilities of extensive 
direcf trade between the importers of Leith, Dundee, and Aberdeen 
with mills in the United States. Still the business put through from 
year fo jediV has amounted to very considerable proportions, and the 
impoiters all feel that there is no reason for less prospective trade on 
the ii§w crop. In fact, I find in these cities, as elsewhere, a keen 
appreciation of the efforts of the Department of -Commerce and Labor 
and of American mills for the extension of trade and a hearty deter- 
mination to second them. 

RELATIONS OF EDINBURGH AND LEITH. 

In America we would probably speak of Edinburgh and Leith as 
the twin cities. Their corporate boundaries join, and a stranger can 
not tell where one begins and the other ends. Thus they are prac- 
tically one city, with a combined population of 430,000, of which 
350,000 is ascribed to Edinburgh and 80,000 to Leith. The popula- 
tion of the trade territory tributary to Leith as a distributer of flour, 
outside the two cities, is placed at 250,000 to 300,000. Leith being 
the port of entry claims the mills and the flour importers. The docks 
and facilities of Leith for handling flour are unsurpassed. There 
has been no marked increase in recent years in the milling capacity, 
and not much is known outside of the mills themselves regarding 
their operations except as they are met with in a competitive w^ay. 
Then, too, the policy of the mills seems to be aggressive enough to 
maintain established trade. As in the case at other milling points 
in the United Kingdom, the ground gained by the local mills in 1904 
has never been lost. The Leith mills, however, do not grind for fancy 
high standards of quality, as some at other points prefer to do. They 
are content to hold the trade they have on bread flours, and to this 
end use hard wheats and produce what would be termed " long " 
rather than " short " patents. The extent of their operations of late 
may be judged from the fact that in 1907 there were imported 
4,655,000 bushels of wheat, enough to make considerably over 1,000,000 
barrels of flour, and from January 1 to June 30, 1908, the wheat 
importations exceeded 2,454,000 bushels, or enough wheat to make 
545,000 barrels of flour. Very little local wheat comes to the mills of 
Leith, though some thousands of bushels reach there annually by 
coastwise vessels, not included in the foregoing figures. While always 
grinding on the harder varieties of wheat, it is noticeable that the 
mills are now using the milder hard wheats, particularly those of 
Argentina. 



46 FLOUR AND WHEAT TRADE. 

FLOUR TRADE OF LEITH. 

Leith's imports of flour in 1907 were 554.000 barrels, and for the six 
months ending June 30, 1908, they Avere 802,000 barrels. Transac- 
tions are in sacks of 280 pounds each, and packages mostly used are 
jute 280-pound and 140-pound bags and cotton 140-pound bags. Of 
the foreign flour imported the United States furnishes 85 per cent, 
Canada 10 per cent, and European countries the remaining 5 per cent. 
I can see no reason why this percentage of trade should not be re- 
tained by the United States. The total volume of American trade in 
flour would be largely increased only in event of failure of the wheat 
crop in Argentina to furnish such abundant supplies as for the past 
two years. The mills are prepared to supply two-thirds of the re- 
quirement of flour, and very considerable amounts of flour from the 
mills of Glasgow, Carlisle, Liverpool, and Hull find their way into 
what may be termed Leith territory. Even with its large percentage 
of imported flour it is doubtful if the United States furnishes over 
one-fourth of the flour consumed under present conditions. 

PREFERENCE FOR AMERICAN FLOURS. 

The bread used in and about Edinburgh and Leith and territory 
naturally tributary is the bake-shop product, very little home baking 
being done. Large bakeries are forcing the smaller shops out of 
business, as seems to be the case wherever bake-shop bread has super- 
seded home baking. American mills should not relax their efforts on 
this trade, for our flours are very well thought of, and with anything 
disturbing the wheat supply of the local and English mills buying 
would turn to American goods. Conditions have favored the local 
mills the past two years — in fact, for four years past — and still our 
American flours have not lost trade as heavily at Leith as at some 
other ports. There has been a shift, however, in hard-wheat flours 
from Minnesotas to hard winters. These constitute about three- 
fourths of the imports from the United States, while the other one- 
fourth is soft winter-wheat flour. 

With delayed and irregular shipments to overcome, so that ship- 
ments may be relied upon to reach destination within forty days from 
mill, the Leith importers give assurances of not only maintaining 
but largely increasing their trade with American mills. The Ameri- 
can flours coming to Leith as a rule are of a higher class than those 
of local production. They have the preference at slightly higher 
prices than the home product, and this advantage could be dwelt 
upon profitably, it would seem, by judicious advertising, with more 
than a fair prospect of increased trade. 

INVITING FIELD AT DUNDEE. 

Dundee has a population of upward of 160,000 and is a first-class 
port of entry. Weekly and semiweekly steamers reach Dundee from 
London, Liverpool, Hull, and Leith. Some of these are rather small 
affairs, owned and operated by flour-milling concerns. The territory 
tributary to Dundee contains a population of 80,000 to 100,000. 
Assuming the consumption of flour to be one sack, or 280 pounds, per 
capita, there is a possible annual requirement for Dundee and terri- 
tory of about 360,000 barrels. There is only one mill at Dundee, and 
that is running on blended wheats with a weekly output of 1,200 



UNITED KINGDOM. 47 

sacks, equal to 1,T00 barrels. The importations from all points, 
British and foreign, may possibly reach as high as 160,000 barrels 
annually, but by far the greater part of this at present is British flour. 
If by any means these can be displaced, a considerable field is open 
for American enterprise, since of late years but slightly more than 
35,000 barrels annually reaches Dundee from the United States. 
Canada has some foothold here, about 7,000 barrels per annum, and 
German, French, Hungarian, and Australian flours of inconsiderable 
amounts, say from 500 to 700 barrels from each of the countries 
named, also find a few customers in and about Dundee. 

As in most Scottish communities hard- wheat flour has the prefer- 
ence in the Dundee market, being a full three-fourths of all con- 
sumed, the soft winter wheat product forming the balance. There is 
little home baking. 

The United States shipments reach Dundee via London and Leith 
at an arbitrary rate above London of about 6 cents per 100 pounds. 

ABERDEEN AND TRIBUTARY TERRITORY. 

In population the city of Aberdeen is said to equal that of Dundee, 
say 160,000 to 170,000, but with much less tributary territory. It is 
thought that outside of Aberdeen proper a population of not exceed- 

■g 20,000 or 25,000 is dependent upon it for its bread supply. There 
is no flour mill in Aberdeen. A liberal allowance for flour consump- 
tion would be 260,000 barrels per annum for the entire territory, 
including the city. One baking concern, the Northern Cooperative 
Baking Society, doing a general merchandise business, manufactur- 
ing boots and shoes, and having its own oatmeal and feed mill, is by 
odds the largest baking concern. It bakes up weekly about the equal 
of 1,150 barrels of flour. There is at present no direct line of steam- 
ers from America to Aberdeen. A line from Montreal that operated 
three steamers last year was sold out and the boats withdrawn from 
this service. 

An old-established firm, that of Watson & Philip at Dundee, hav- 
ing warehouses in both Dundee and Aberdeen, does practically all the 
importing of American flour for both cities. As is the case at other 
points, their operations have been greatly handicapped by long time 
in transit and irregularity in arrivals of American flour. The inter- 
est of buyers, though better suited with American product, is fre- 
quently directed to flours milled at Leitli, Glasgow, and other British 
points, because of the certainty of prompt delivery. Hog products 
from Chicago, in which Watson & Philip have a large trade, require 
but six days from Chicago to steamer, and make the remainder of 
the trip in twelve to fourteen days, while flour seldom makes the 
trip from mill to Dundee inside of forty days, and more often re- 
quires twice that time. 

The north of Scotland covered by Dundee and Aberdeen is worked 
by Glasgow flour importers as well as by the British mills, and the 
former have possibly a dozen traveling men canvassing the buyers in 
weekly or fortnightly trips. 

DELAYS IN SHIPMENTS. 

I have suggested in several conferences held with the management 
of steamship lines at Glasgow relative to the delay in American ship- 
ments of flour, that the American representatives of the steamship 



48 PLOUE AKD WHEAT TRADE. 

lines making contracts with railroads and millers for export flour 
should be instructed to follow up the contracts when made, to see that 
every reasonable effort is put forth to get the stuff to the seaboard. I 
have maintained that the duty of the steamship agent did not end 
with the booking of the contract, but that he should see that the 
other parties to the contract, the railroads as well as the miller, 
should do all possible to expedite it. What in the past has seemed 
nobody's business should be made the express business of the carrier 
making final delivery. I am pleased to say that my view on this 
point was given consideration, and in two cases assurances were given 
that methods would be adopted carrying out my suggestion. I think 
the steamship people are all anxious for some solution to the vexing 
question of delays. They need more business, as the scores of idle 
freight steamers at all ports, laid up because there are no cargoes 
offering, are ample proof. 

NOTES ON THE SCOTCH FLOUR TRADE. 

The natural preference at all Scotch points is for American flour. 
The importers keenly feel the competition of home mills. America 
can hold the preference, and overcoming present obstacles can make 
decided growth. 

It would greatly aid American mills if they would frequently send 
to their importers for samples of British-made flour against which 
they are in competition. The importers will gladly secure and send 
such samples. Particularly is this of value to the miller on the ad- 
vent of the new crop of Australian and Argentine wheat. 

Rates to Glasgow from Dunkirk, France, via Leith, are 12s. 6d. per 
long ton (equal to 13^ cents per 100 pounds). This is by canal from 
Leith, and of course there is no landing charge. The rate by steam- 
ship from Dunkirk is 6s. per ton plus 3s. 4d. landing charge. From 
Hamburg to Glasgow the rate is 9s. per ton (9f cents per 100 pounds), 
with a rebate of 6d. (12 cents) per ton, providing the contractor will 
ship 500 tons in one year. 

Millers should always communicate with importers when unable 
from any cause to get shipments out on time. In nine cases out of ten 
the importer can then arrange with his buyer so as to extend time of 
shipment. Otherwise loss may result to both importer and miller. A 
buyer will almost invariably cancel when he finds his shipment has 
not gone forward on time if the market has fallen meanwhile, and the 
importer must make a concession to hold the order. 

Comparatively little consigned flour reaches Scotch markets. Very 
few importers encourage consignments except for sample lots from 
new accounts. The consignment of flour seldom makes money for the 
miller and often embarrasses the importer. Nothing can be gained by 
consigning for future sales or sale on arrival, for, generally speaking, 
unsatisfactory markets prevail on this side when a similar condition 
prevails in the United States. 

Prepayment of freight charges by United States mills is objected 
to by Glasgow importers. 

It is noticeable in the Glasgow flour trade that when a few large 
bakers buy freely nearly all the smaller buyers follow suit. It is 
not uncommon for six or eight months' stock of flour to be contracted 
for in this manner, which the importers have to carry until deliveries 
are called for. Thus there may be long periods when the bakers are 
out of the market. 



UNITED KINGDOM. 49 

Visiting the bakery of the School of Baking Technology of the 
^ > lasgow and West of Scotland Technical College, I learned that the 
st results in bread were obtained by blending three-eights of high- 
iss soft winter " patent " with five-eighths of the best Minnesota 
patent." Approximately the same results in bread are obtained by 
mding a high-class Kansas " patent " with a soft winter " patent " 
d a w^ell-known spring wheat "patent," one-third of each. 
Millers should bear in mind that under the amended British Mer- 
chandise Marks Act the name of the country of origin does not have 
to be placed on the sack of flour, as formerly. The amendment went 
into effect in January, 1907. Thus " blind brands " are used on flour 
that at one time may be of United States origin and at other times 
be made in Germany, Belgium, or France. The lowest seller gets 
the orders. The miller gets no credit for his excellence of quality, 
but may have his flour rejected if slightly below the standard of some 
foreign flour under the same brand. 

AN INVITING FIELD. 

TRADE CONDITIONS REVIEWED OPPORTUNITIES FOR AINIERIGAN MILLS. 

A sense of the magnitude of the field for the enterprise of Ameri- 
can millers in Great Britain grows on one the more the possibilities 
are investigated. Attention has been called to conditions that were 
unfavorable to extension of trade with the sole view of their being 
ultimately overcome so far as possible to accomplish. Granting that 
transit time may be shortened to 30 or 40 days, mill to destination, 
and regularly maintained on that basis, importers in every port wdll 
be encouraged and a new stimulus will be infused that in a year's time 
will show some surprising results. Ocean traffic the world over is now 
(September, 1908) abnormally light, as is evidenced by the number of 
line steamers idle in every port. Hence, in booking freight greater care 
than usual must be exercised that shipments are placed so that they 
will not be delayed at ports of departure by infrequent sailings. 

After all that has been said on this subject, it should now be suf- 
ficiently impressed on all who would do an export business in Ameri- 
can-made flour, that painstaking care should always be given by 
the shipper to all details relating to the transportation of his flour. 
Maintenance of uniform and dependable quality will in proper time 
adjust the price to the quality. Just what the quality should be, or 
just what the characteristics of the flour should be, must be deter- 
mined by the miller after study on his part of the needs of the various 
markets. I have already stated what in my opinion would be best 
adapted to the varying conditions as I have found them in the ports 
visited. There is no doubt about American mills being able to meet 
the requirements, but it will be advisable to be fully informed either 
by personal investigation, as several American mill managers are 
now doing, or by means of interchange of samples with importers 
at the several ports. I can only advise in a general way by indicating 
the apparent needs as I see them and this I have already done quite 
fully. 

HOME SUPPLY OF WHEAT — OPPORTUNITIES FOR DIRECT SALES. 

In reviewing the work of investigation in Great Britain it is proper 
to say that some of the British mills can not be excelled in point of 

2304—09 4 



50 FLOUK AND WHEAT TRADE. 

quality of the blended flours they produce. Others do not aim at so 
high a point of excellence, or they find it more profitable to cater 
to a less exacting trade. A few try to make distinctive grades as to 
hard or soft wheat flours. There is a demand for ever}^ kind and 
quality of American flour, but it does not exist for all varieties in 
any one market. Therefore due diligence must be depended upon to 
seek that kind of trade desired by the individual mill Avishing to 
establish itself here. Competition is not likely to be any more severe 
here than in the home trade, once the American mill has a foothold 
and can deliver uniformly as to both time and quality. 

As a rule the Avell-established flour importing houses and mill 
agents at the various large ports, being organized for properly look- 
ing after American mills' interests, should have unqualified support. 
They should be given every consistent encouragement by low relative 
prices and such means of effective advertising as may seem best. But 
there is an additional considerable field where millers may do direct 
work of their own through their managers or traveling salesmen, as 
they do in the United States. An extensive and populous territory 
in England, not now effectively covered by importers, can be reached 
by way of Hull and Newcastle-on-Tyne, to which ports there are 
direct and frequent sailings from the United States. Not much 
American flour has found its Ava}^ into those ports in recent years, and 
importers do not seem to consider it worth their efforts. It Avould 
seem to be an inviting field for the marketing of surplus American 
flour for such mills as are prepared to spend moderate sums of money 
in developing ncAv trade by independent and direct connections Avith 
the large class of bakers and distributers or jobbers. Even in Lon- 
don, Avhere the importers do very little in soft av inter wheat flour, 
seA^eral important baking concerns buy large quantities direct from 
soft Avinter Avheat mills. This trade could be materially extended, for 
the baking trade in such goods as must be made exclusively from 
soft-wheat flour is constantly increasing, very much as it has in the 
United States. 

BRISTOL AN INVITING POINT. 

A review of British flour trade would not be complete without 
pointed allusion to the possibilities of more business in and about 
Bristol. Something like 500,000 sacks of flour were imported into 
Bristol last year, this quantity being about half the amount of cus- 
tomary imports some years ago. The shipping, receiving, and dock 
facilities of this port are A^ery extensive and complete. The recent 
addition of the Royal EdAvard Dock is a striking evidence of pro- 
gressive spirit. The largest ships may enter through a lock 875 feet 
long by 100 feet Avide in Avater 36 feet deep at loAvest tides, varying 
to 46 feet at ordinary spring tides. Some 30 acres are included 
in this dock, Avhich, with the older docks at Bristol, give that city 
144 acres of area devoted to dockage facilities. Four lines of raihvays 
communicate directly Avith all the docks and serve a population of 
2,500,000 within 50 miles. The city itself has about 350,000 people. 
There are local mills Avhose Aveekly capacity is estimated at 18,000 
to 19,000 sacks of 280 pounds each. They ]:)roduce their flours from 
English and different foreign wheats, according to the season's sup- 
plies. They do not ordinarily blend any American flours Avith their 
own product. 



UNITED KINGDOM. 51 

There are five importing firms at Bristol liandling American flour 
(a list of whom is on file with the Bureau of Manufactures). Of the 
imports, not over 10 per cent is Canadian flour and a less per cent 
is European continental. Hard winter wheat or Kansas patent flours 
are in most favor, with some demand for spring wheat patents and 
clears, and considerable soft winter wheat straights or " extra fancies." 
But little soft winter patent seems to be wanted in the Bristol market. 
I can see no reason why blended flours of hard and soft wheats, as 
heretofore recommended for Manchester and the central and north 
parts of England, should not find an ultimate market in and about 
Bristol, for the condition of trade and baking methods are much 
the same. I can not find that any serious efforts to establish such 
Hour have ever been made by American mills. The importers would, 
1 think, be willing to cooperate with mills prepared to match the 
grades the trade are familiar with, and I think superior flours to 
►those in use can be made by our Central States mills. The trade 
methods, terms, packages, etc., are much the same as at other ports, in 
which exporting mills are already well versed. 

MILLS AND MILLING METHODS. 

Flour milling in the United Kingdom presents features of decided 
interest because of the progress and groAvth attained by this industry 
in recent years. The number of mills is decreasing, but this is more 
than made up by the erection of mills of large capacity. There are 
two quite distinct classes — the interior or country mill and the port 
mills. Both classes have increased greatly in capacity the past ten 
years, but the most modern plants and the largest have naturally been 
established at ports having the best facilities for receiving supplies 
and distributing product by rail and steamships. The competition 
which has reduced the sale of American flour to about one-half the 
volume of former years of course comes from these modern coast 
mills. Most of them are imposing structures of excellent and striking 
effect and architectural design. The admiration excited by their 
outward appearance is not lost upon inspection of their interior ar- 
rangement and equipment. On most of them money seems to have 
been spent with a lavish hand and with a view not only of securing 
the best mechanical results but of insuring stability for generations 
to come. One plant of 20,000 barrels per week capacity with adjoin-. 
ing elevators and storage houses has cost $1,000,000 to build and 
equip, or say $300 per barrel of daily capacity. There are many of 
these recently built mills of large size and expensive, not to say ex- 
travagant, type at coast points, which are but slightly less elaborate 
in appearance and construction than the one referred to. The best 
machinery available has been installed in all of them. One does not 
have far to go in any of the large ports to find " the model mill of the 
Kingdom," and at some ports there are several of them. The spirit 
of emulation, backed by liberal supplies of capital, seems to have 
had plenty of play among the now prominent mill owners, some of 
whom but a few years ago were operating plants of modest size and 
were minor factors in the industry. To-day their influence is felt 
wherever flour is made for British consumption. 



52 FLOUR AND WHEAT TEADE. • 

BRITISH AND AMERICAN METHODS CONTRASTED. 

In America it has become quite the custom of many of the large 
milling concerns to follow the practice of '' hedging " their purchases 
of cash wheat by sales of future wheat in the open market when flour 
could not be sold in equal volume, thus protecting themselves against 
loss in event of decline in values, but of course limiting the possible 
profits to the gain in the selling price of flour and feed above the 
cost of wheat plus the manufacture and sales expense. It is not so 
with milling in the United Kingdom. It is no unusual thing for mills 
to carry in store and in forward contracts sufficient wheat to main- 
tain full-time operation for four to six months with no " hedge " 
against such supplies other than current sales of flour for forward 
delivery. The bu^dng of wheat for a very considerable number of 
British mills in recent years has been very wisely or very fortunately 
done and at times must have been in exceedingly large volume during 
periods of depressed prices, subsequent rises in market values having 
brought great profits to the milling concerns. While the past year 
is generally conceded to have been a " lean " one for most mills, the 
record of the few years previous was full of satisfaction in most 
cases. A year ago one concern paid practically 100 per cent to its 
shareholders out of the previous twelve months' earnings and carried 
a comfortable sum to surplus. Others are knoAvn to have done equally 
as well. They have the plants, built for the most part out of earn- 
ings, to show for their work, besides dividends paid. How successful 
this method of operating and carrying large stocks of wheat and flour 
will work out in the future with the new crop on a high basis remains 
to be seen. In the meantime the successful mills have large surpluses 
to draw upon where not invested in additional plants. Competition 
has for the past year been so keen that there is little fear of additional 
mill construction for some time to come, although there is consider- 
able increase of capacity nearing completion which was begim months 
ago Avhen the prospect was not so clouded by the gloom of " over- 
milling," as it is now called. 

AMERICAN MILLS MAY EXTEND SALES. 

American mills, located as they are near to the source of wheat 
production, need not be disheartened by the " overmilled " condition. 
The worst has probably been experienced, and a gradual change for 
the better is likely to follow. Without the speculative profits that 
favoring conditions have brought the British mills, they have few 
advantages at any time, and in seasons of full crops in the United 
States will have none. The actual cost of producing and marketing a 
given quantity of flour- in the United Kingdom in a large way is 
materially greater than it is to produce the same grade of flour in the 
United States and market it here. The labor cost here is less per 
man, but much more labor is employed. Based on any unit of capac- 
ity from ten barrels per hour up, I feel sure that the American cost 
per barrel for labor is only about half that in the United Kingdom. 
In items of fuel, interest on investment, cost of packages, adminis- 
tration and sales expense, the advantage is with the American mill. 
But tlie British mill is thoroughly organized for advertising and 
pushing sales in every part of the Kingdom and is securing higher 
prices than would otherwise be posbible. With competition among 



UNITED KINGDOM. 63 

themselves destroying: the fruits of advertising, it would seem likely 
tliat even moderate efforts might add much to American mills' trade 
in the United Kingdom, while an active campaign for new business 
would bring abundant results. This is not only my own opinion, but 
IS that of men of many years' experience whose judgment I have been 
careful to consult. 

MARKETING MILL FEED. 

Since the present high range of values of mill feed in the United 
Kingdom and on the Continent has been so instrumental in su])port- 
ing the milling industry here, this feature as well as the sale of flour 
will doubtless be given consideration by mills in the United States 
in the future. Any surplus of mill feed should be marketed where 
the surplus flour goes instead of being permitted to be dumped on the 
home market to break the price of the entire feed output at home. 
It may be easier to say this than to accomplish it, but I think the 
statement should be carefully considered. American mills may well 
give greater attention to the preparation of mill feed for the foreigTi 
trade because of the low relative flour prices when feed rules high. 
Broad bran as made here is in great favor and at a high premium, 
but our American mills can not profitably export broad bran on 
account of its higher rate of freight, owing to its excessive bulk. Why 
not spend some money in educating buyers abroad, and for that matter 
at home, to the advantages of fine-ground bran ? There is no reason 
why bran should not be ground as fine as low-grade flour. It would 
lose none of its nutritive qualities, would probably digest more 
readily, would pack closely, and would not heat. The problem of the 
transportation of bran being thus solved it would only be necessary 
to educate the feeders of stock to the advanced idea of the digesti- 
bility of bran in powdered form. I am led to this line of thought 
by the fact that experimenting on pulverizing bran is being done 
here, and the possibilities from an American standpoint are interest- 
ing. The object of the experiment is to reduce the finer portion of 
bran, which is sifted out in the process of separating the coarse from 
the fine, and which in this condition is less valuable than the mid- 
dlings or pollard. By grinding it on attrition mills or disk machines 
designed for the purpose, it can be disposed of by mixing with the 
middlings when it is worth a dollar a ton more. What I saw was 
finer than middlings — powdered, in fact. Such a condition of fine- 
ness, suggesting greater digestibility, probably adds to the intrinsic 
feeding value more than the cost of preparation, but the practical 
j)oint in its favor is that the bulk is reduced. The advertising and 
" talking points " of promoting digestion would probably appeal to 
the scientific feeder and dairyman whose number is increasing con- 
stantly. 

TRADE WITH MILLS MAY BE INCREASED ^BLENDING METHODS. 

Investigations lead me to believe that there is a considerable in- 
creased volume of trade possible for American mills directly with 
flour mills in the south half of England. The flours best for such 
trade are high-class hard wheats of either spring or Kansas. They 
must in reality be high class, for they would go to mills who deal in 
most cases directly with their baking trade. These mills are using 
hard imported wheat and soft home wheat blended, and some are now 



54 FLOUR AND WHEAT TRADE. 

using American hard wheat patents in their blends. IN'early all of 
them are prepared to use flour in this manner and would do so when- 
ever advantageous. 

Most of them are using for their hard wheat requirements on this 
croj) large quantities of Plate (Argentina) wheat and getting the 
needed strength by the addition of American No. 1 Northern Duluth 
or Manitoba No. 1 and No. 2. With No. 1 Northern Duluth, costing 
them about 40 shillings per 480 pounds, the Plate wheat would come 
at about 35 shillings and 6 pence per 480 pounds. This equals a dif- 
ference of 14 cents per bushel in favor of Plate wheat. The Plate 
wheats, while heavy in weight, plump, and sound, lack sadly in 
strength, and either hard spring wheat or high-class patent flour 
must be used in the blend to make a flour that the bakers will buy. 

LOW COST OF PLATE FLOUR. 

The miller is anxious to use all the Plate wheat he dare, because of 
the low relative cost and the fact that in the washing processes pre- 
parator}^ to grinding much larger quantities of water are absorbed 
by the Plate wheats than any others. This is a peculiar quality of 
the Plate wheats on this crop — their water-absorbing capacity. It 
need only be explained that in this country, generally speaking, all 
wheat is washed and '' soaked " before going to the rolls. The more 
water the wdieat absorbs before grinding the better for the miller. 
But water detracts from the strength of the flour, and some sorts of 
wheat must be partially dried out again before milling. Not so with 
the Plate wheat. It's a " good " wheat in that respect. The home- 
milled Avheat has no more strength than the Plate wheat but has bet- 
ter color-producing qualities. To get the necessary amount of 
strength into the flour, therefore, either spring or Kansas hard wheats 
must be ground with the home and Plate wheats, or hard-wheat flour 
must be blended with the mill's finished product. Since the mills are 
prepared to do this blending of flours they can, under proper condi- 
tions, use largely of American hard-wheat patent flours. Such mills 
as have plenty of home wheat at less cost than the Plate varieties 
would also be buyers of American flours of various grades of hard- 
wheat product. 

THE MILLS AND THE BAKERS. 

There is active strife for trade among the country mills about Lon- 
don and the mills within the metropolitan district, and the quality 
of goods is entering more and more into the fight. They are all after 
the bakers' trade, and they are not keeping to their own districts as 
much as would be well for them to do. The city mills are going out 
after the country or small-town bakers, and the country mills are 
reaching into the city baking trade. The city mills have natural ad- 
vantages by reason of location in securing imported wheat at less 
cost than the interior mills. The latter endeavor to produce a higher 
quality of flour, and will be forced more and more to depend upon 
quality for holding trade. My judgment is that it woulcl be better 
for the blending mills to use 50 pounds of high-class American hard 
wheat patent in every barrel produced than to use IJ bushels of high- 
grade spring Avheat with every 4^ bushels of wheat ground. The net 
cost at present prices would be the same in both cases, while the 



UNITED KINGDOM. 55 

former method would produce better results in point of quality with 
less cost of operation. This is a milling question which it would be 
well for American hard-Avheat millers to consider. I can see no rea- 
son why the English miller should not use largely of American flour, 
and in canvassing the subject with one miller who does, he said he 
felt certain much more could be sold to English millers who are com- 
peting against the big coast mills if they could get the high quality 
in American goods that they would need to have. 

BREAD-MAKING RESULTS. 

A sack of 280 pounds of flour as the baker blends it is supposed to 
make 100 loaves of bread that will weigh 4 pounds each when baked. 
The miller above referred to assured me that he knew of tests on 
English blended flour made by port mills showing only 96 loaves of 
4 pounds each, and some as low as 90 loaves to the sack of flour. 

The actual bread-making results by the use of American hard- 
wheat patents ought to be gone into by our exporting millers in view 
of the possible trade, using methods of demonstration that can not be 
otherwise than convincing. If an excess 4 to 6 loaves of bread worth 
to the baker 10 cents each and of a better quality can be produced by 
blending American flour, the fact ought to be made plain to all users 
of flour in this market. I have CA^ery reason to believe that results 
practically as aboA^e can be shoAvn. 

INSPECTION AND CERTIFICATION. 

HANDLING OF GRAIN ACTION BY THE INTERNATIONAL COMMITTEE. 

My attention has been called by the officers of the London Corn 
Trade Association, generally knoAvn as the " Baltic," to the unfavor- 
able state of trade relations with American grain merchants as to 
wheat and corn, the latter commonly termed " maize " in this and 
European markets. I inclose a copy of the annual report offered 
under date of May 12, 1908, and call attention to the folloAving para- 
graphs relative to American (United States) grain certificates: 

Complaints have been received and investigated of improper certificating of 
United States grain and brought before the authorities issuing such certificates, 
as in former years, without any satisfaction being obtained. Where, however, 
errors were made in one or two cases in Canada the attention of the Canadian 
government, through the kind and prompt interA^ention of the High Commis- 
sioner, Lord Strathcona, was directed thereto, with the most satisfactory results, 
the claims of the buyers having been fairly and speedily met. 

The International Committee of American (United States) grain certificates 
has been in negotiation with the A^arious exchanges there, but without success, 
as there seems little, if any, desire to recognize the evils complained of, much 
less to endeavor to provide any remedy. That committee would probably huxe 
been compelled to invite European importers generally to unite on drastic 
measures to force American shippers to take a more reasonable attitude had 
they not learned that President Roosevelt has taken up the matter and that 
there are now bills before the American Senate and House of Representatives, 
which, if carried, will transfer the grading and issuing of certificates for all 
United States grain to the Federal Government, as in Canada, with, they hope, 
the like satisfactory results. 

I also inclose copies of letters passed between the president of the 
London Corn Trade Association and United States Senator McCum- 
ber in February and March last, the former setting forth the position 
of the London Association, which, in this matter of urging a reform 



56 FLOUR AITD WHEAT TRADE. 

in American methods, is acting in conjunction with the International 
Committee, so called, made up of the representatives of the various 
United Kingdom and European grain exchanges. 

AMERICAN GRAIN OFF IN GRADE. 

The trouble appears to be that for several years shipments of 
American wheat and maize w^hen arriving on this side are in many 
cases off in grade or short in weight of the quality and quantity 
specified in the certificates issued by the port from which the grain 
was forwarded. Under the prevailing terms no redress is possible, 
and it is known that serious losses have resulted. The officers and 
prominent members with whom I have talked feel very deeply on the 
subject, and assure me that the same sentiment exists at all the United 
Kingdom and European importing centers. If I can read their inten- 
tions correctly they mean to do no more business with American 
houses on certificate grain than absolutely compelled to by unfavor- 
able conditions in other lands. Since Canada and the Argentine are 
developing rapidly under the stimulus of large investments of Britishi 
capital in both countries, it would seem the part of wisdom if the 
grain merchants of Chicago, New York, Philadelphia, Baltimore, 
Kansas City, Galveston, Toledo, Duluth, and St. Louis, through their 
organized grain exchanges, would agree in some manner for due con- 
sideration of the grievances. The officers of the London Association 
assert that so far no attention officially has been paid to their requests 
and suggestions, and they are at a loss to account for the seeming 
neglect of our American exchanges and boards of trade to the interest 
of the foreign buyers. 

The subject was taken up last February with Consul-General 
W^ame, who advises me that, being aware of the high standing of the 
London Corn Trade Association and the International Committee, 
he duly forwarded a letter prepared by the chairman, Mr. Robert A. 
Patterson, addressed to President Roosevelt, wherein was urged such 
I'eforms as would overcome the causes of friction. I inclose a copy 
of this letter under date of January 20, 1908, and also draft of the 
scheme proposed by the International Committee, dated January 24, 
1907, which has so far received no recognition from the American 
grain exchanges. 

IMPORTS OF CORN. 

London's imports of corn (maize) have been steadily growing the 
past four years, while the imports of wheat during the years of that 
period do not materially vary. The following table gives London's 
annual imports of maize and wheat for the past four years, the figures 
representing bushels: 



Year. 


Maize. 


Wheat. 


1904 


11,900,000 
12, 500, 000 
14,200,000 
15, 400, 000 


31 , 400, 000 


1905 


30, 500, 000 


1906 


30, 500, 000 


1907 


30, 400, 000 







These figures represent quantities so large, when compared with 
the United States, total exports of the two grains, as to be worthy of 
consideration. 



UNITED KINGDOM. 57 

As no corrective legislation can be enacted that will be effective 
for at least a year to come, and since the problem as now presented 
is one involving a commercial question of very grave importance in 
event the United States should be blessed with abundant crops this 
year, and of far more immediate importance should other grain-]:>ro- 
ducing nations be favored with larger crops than heretofore, it would 
seem the part of wisdom for agreement on terms that would be sat- 
isfactory to all engaged in the international grain trade. A con- 
ference might be called by which representatives of the American 
grain exporters could meet the International Committee and take 
final action. 

THE M 'cumber BILL APPEAL FOR ACTION BY THE LONDON CORN TRADE. 

[Follow^ing is the correspondence referred to in the report of 
Special Agent Davis :] 

London Corn Trade Association, 

London^ 15th February. 1908. 

Sir : Understanding that you are in charge of the bill for ei^tab- 
lishing a system of grain inspection entirely controlled by the Federal 
Government, I beg to inclose you copies of letters which, by direction 
of my committee, I am addressing to the President of the United 
States of America and to the Secretary of Agriculture, and would 
take this opportunity of assuring you of the warm support of the 
European grain importers, whom I have the honour to represent, who 
are very dissatisfied with the present system of inspection. 

I believe that great efforts are being made to persuade your Senate 
and House of Representatives that the proposed change is not only 
unnecessary, but not generally desired, but I can assure you that 
unless some such change is made, and that shortly, your export trade 
will suffer severely. 

European buyers have lost confidence in the reliability of United 
States certificates, and American grain consequently suffers in price, 
buyers giving a preference whenever possible to other grain, and only 
buying yours when compelled to do so, or at a reduction in price suffi- 
cient, in their opinion, to compensate them for risks they run in 
buying certificate final. 

I am also informed that the supporters of the present system allege 
that your farmers would suffer by the introduction of an improved 
(i. e., honest) inspection, because they would no longer obtain from 
European buyers a premium over the price of No. 2 grade for their 
choice grain. This contention is either frivolous or it seems to admit 
that the European buyer is not or should not be honestly treated. By 
far the largest export trade is in No. 2 or lower grades, especially as 
regards corn, which is, I understand, particularly referred to, propor- 
tion sold of anything higher in quality or grade being comparatively 
very small, so that farmers would not lose business from European 
buyers of the better qualities. On the other hand, even the present 
grading rules universally provide for No. 2 being sound, dry, and 
reasonably clean, and if these requirements were properly fulfilled 
the farmers' position should not be altered in any respect by the pro- 
posed change of the grading authority. Moreover, I do not believe 
that American farmers, dealers, or exporters generally do or would 
wish to benefit by a system which would permit of anything but 



58 FLOUR AXD WHEAT TRADE. 

honest and straightfonvard inspection and certificating, and I am 
convinced that the proposals embodied in yonr bill are greatly needed 
in the interest of and would be for the l)enefit of all honest traders 
and farmers in the United States. 

We only ask that we shall be put in no Avorse position as regards 
the grain we have to receive under certificates than the American 
trader, but under the present system, while the European importer 
bu3'^s the same grades under the same rules for grading as the Ameri- 
can buyer, it is a matter of common knowledge that the grain exported 
and certificated at shipping points is several cents a bushel inferior 
in value to that received by the American trader. I observe in your 
bill that no provision is made for the inspection of grain for foreign 
export, and to give any security or satisfaction to European importers, 
such a provision seems absolutely necessary, and I would further sug- 
gest that the rules governing the grades should be permanent^that is, 
that the crop must fit the grading rules, and not the rules fit the crop. 
For example, if grain of any crop will not pass the standard of No. 2, 
as required by the rules, it must go on a lower grade, and not that, as 
frequently happens, the grading rules may be altered to suit the 
exigencies of the crop. 

This has been found practicable in Canadian government inspec- 
tion, and would doubtless be found equally so with you. 

If this letter will be of any assistance to you in putting forward 
the views of the European grain trade, you are at liberty to make 
any use of it you may think desirable. 

Thanking you for your efforts in this matter, 
I am, sir, yours, truly, 

(Signed) Robert A. Patterson, 

Ghaii'man Eiirofean International Committee 

on American Grain Certificates. 

Senator McCumber, 

United States Senate^ Washington^ U. S. A. 



Washington, March 2, 1908. 
Mr. Robert A. Patterson, 

London^ England. 

My Dear Sir: I was very much gratified to receive your favor of 
recent date, relative to federal inspection of grain. Your letter 
fully substantiates the claims I have repeatedly made to the grain 
trade of the country as well as in the United States Senate, that on 
account of the carelessness and intentional dishonesty in grading 
grain for export a great wrong was being perpetrated upon the 
foreign purchaser, and an equal injustice to the American producer; 
that the only person who benefits by the overgrading of export grain 
or the undergracling of the grain which comes from the farmer is 
the one who thus misgrades the grain; that such misgrading is 
seriously and injuriously affecting our export trade. 

I have had occasion to cite the complaints of the foreign purchaser 
and I am more than glad to have the expression of your views con- 
firming my statements. 

I am satisfied that if the inspection and grading of all gTains shall 
be conducted by the Agricultural Department of the United States, 



UNITED KINGDOM. 59 

the impartiality and justice of such grading will necessarih^ stimu- 
late the confidence of the foreign purchaser and add materially to 
the value of the American grain. I am satisfied that we raise as 
good grain in the United States as is raised anywhere in the world. 
I am equally satisfied from the best information I can secure that 
for the most part our best grain is used at home and the poorer 
qualities shipped abroad, or the good so mixed with the poor as to 
depreciate its quality, and often shipped under improper certifi- 
cation. With a government certificate based upon a government 
standard Avliich should accompany every cargo of grain, showing 
its grade and its exact condition as it leaves our port, our grades 
would immediately gain the confidence of the foreign purchaser and 
exert a very favorable influence upon our grain trade. 

I receive a similar letter from Mr. A. Coan, president of a grain 
association of Eotterdam. I have taken the liberty w^ith your per- 
mission to use your letter before the committee on agriculture which 
has charge of the bill which I introduced to provide for federal 
inspection, and as Mr. Coan's letter coincides w^ith your statements 
and with the statements of our American consuls, I have also used 
his letter in the same way. 

You undoubtedly understand that under our dual form of Govern- 
ment any such advance step as the assumption of national control 
over commercial transactions that have heretofore been conducted 
under the legislation of a State or the rules of a board of trade or 
chamber of commerce of our great cities, can only be accomplished 
by creating a strong sentiment and demand for the advanced legis- 
lation. Nothing Avill better tend to create this sentiment and bring 
about the demand than the diffusion of knowdedge of the injustices 
and wrongs perpetrated under the present system. 

Hearings are now being had before both branches of Congress 
upon the subject of national grain grading and inspection, and 1 
have no doubt but that in time favorable action will be had. 

I shall at all times be pleased to receive any communication or 
suggestions from j^ou. 

I beg to inclose you copy of bill which I have introduced in the 
Senate of the United States and which has the approval of the 
honorable Secretary of Agriculture. 
Very truly, yours, 

(Signed) P. J. McCumber. 

letter to president roosevelt. 

London Corn Trade Association, 

London^ 20th January^ 1908. 

Mr. President: I am instructed by the European international 
committee on American grain certificates to communicate to you the 
following facts: 

There has been for some years past a general consensus of opinion 
among European buyers of grain that the operation of the present 
system of certificating grain for export is increasingly unsatisfac- 
tory, and that whatever may be its merits for the purposes of domes- 
tic trading it no longer gives to European buyers the confidence and 
protection which is necessary in a trade where the only guarantee 
for reliable quality and condition, in exchange for buyer's money, 



60 FLOUR AND WHEAT TRADE. 

is a paper certificate; formerly buyers in buying from the United 
States of America were able, as they still are in their dealings in 
grain with other exporting countries, to recover from shippers any 
damage they sustained owing to defects in quality or condition, but 
since the introduction of the certificating system this is no longer 
possible. Even after its introduction — indeed until comparatively 
recent times — it was seldom found that any serious abuses arose, 
and trusting to their belief in the reliability of the grading system, 
buyers were willing to continue trading with America on less favor- 
able terms than they demanded elsewhere; but whether from the 
increase of individual competition, or what is probably more im- 
portant, the rivalry between the older ports and their smaller and 
more recently established competitors, there seems little doubt but 
that the standard of grading has been lowered, either temporarily 
or, in some cases, permanently, in order to attract business from 
interior points, and we in Europe feel that the burden of such de- 
parture from the more reliable and stricter method in force formerly 
has been borne chiefly by European importers who, being far away, 
have no power of protecting themselves against errors or worse in 
the grading methods of recent years. The result is that American 
grain suffers as regards price when in competition with grain from 
other countries. 

AN INTERNATIONAL COMMITTEE CREATED. 

The increasing dissatisfaction culminated some tw^elve months ago 
in a general request from the principal European grain centers that 
a conference should be summoned by the London Corn Trade As- 
sociation to consider the best measures to adopt, in order to remedy 
the defects of the present system of dealing in grain from the United 
States. 

The conference was held in London on the 8th November, 1907, 
and was attended by delegates from all European importing coun- 
tries. It was unanimously resolved that a committee be appointed 
consisting of seven members from the United Kingdom and an equal 
number from other European countries (the latter being represented 
as follows — Belgium 1, France 1, Germany 3, Holland 1, and Scan- 
dinavia 1) to suggest necessary improvements and to negotiate with 
American grain trade for their adoption. 

This committee met and drew up a scheme (a copy of w^hicli I have 
the honor to append) which was submitted to the principal grain 
associations of the United States of America, but which, I regret 
to say, did not only prove unacceptable to the American exchanges, 
but even failed to draw any counter proposals from them. Indeed, 
the way in which this subject has been treated by some of the lead- 
ing grain associations there would almost seem to indicate that there 
is no desire to recognize the undoubted fact that serious faults have 
arisen, or that there is any need to amend a system which is respon- 
sible for abuses of which European importers universally complain. 

Traders here generally recognize that a reliable system of inspec- 
tion and certificating presents many advantages, but that to be 
thoroughly reliable it must depend not only upon the expert knowl- 
edge, integrity, and independence of the inspection officials, but that 
the rules for grading, by which these officials are bound, must be 
uniform, applying equally to every port, and should be generally 



UNITED KINGDOM. 61 

known not only in the various American, but also in the principal 
European, grain centers, and that wherever possible, from time to 
time, type samples should be sent to our leading grain associations. 

This*^ is the system adopted by the agricultural department of His 
Majesty's Government in the Dominion of Canada, and has hitherto 
proved generally satisfactory. 

My committee observed Avith great satisfaction your reference to 
this important matter in your last Presidential message, and that 
there is before the Senate and House of Representatives at the pres- 
ent time, a bill embodying some of the above suggestions. 

While they would of course have preferred to get their own sug- 
gestions accepted by American traders, they wish to be permitted to 
offer you their sincere congratulations and thanks for the steps you 
are taking to remedy an undoubted evil, and to assure you of the 
Avarm support of the European grain trade in your efforts. 

I have the honor to be your excellency's most obedient humble 
servant, 

(Signed) Robert A. Patterson, 
Chairman European International Committee 

on American Grain Certificates. 

The President, 

United States of America^ White House^ Washington, U. S. A, 

ACTION ON AMERICAN CERTIFICATES. 

The European International Committee, on January 24, 1907, 
adopted the folloAving resolutions in regard to American certificates 
and contract forms for corn : 

(1) Tliat this European International Committee calls upon the boards of 
trade and commercial exchanges of the United States of America and Canada 
issuing certificates to draw up uniform rules for the grading of grain for export 
at all their A'arions ports and grain centers. Further, that the said certificating 
bodies are requested to send to this committee for agreement such rules properly 
authenticated. When mutually agreed upon those rules are not to be altered, 
unless by mutual consent. 

(2) That should any certificating authority refuse or neglect to issue and act 
upon such rules for grading, this committee shall report same to the European 
associations with a A^iew to exclusion of certificates of said authority from the 
associations' contracts. 

(3) That the certificates of any railroad, elevator, or private trading company 
or person shall not be recognized. 

(4) That this committee calls upon the above referred to certificating authori- 
ties to send, at the beginning of each season, samples representing the recognized 
grades of grain, to certain corn trade associations in Europe, such associations 
to be designated by the international committee. 

(5) That if any buyer questions the correctness of the certificate receiA-ed, he 
shall within ten days after final discharge of the shipment, upon payment of a 
fee of not less than £25, or more than £100 (the amount to be at the discretion 
of the appeal committee), haA'e the right of appeal to a committee of five mem- 
bers elected by the executive of such of the associations in Europe as may be 
agreed upon with the said authorities issuing certificates. Should the appeal 
committee decide that the grain has been improperly certificated, ir shall fix 
the allowance to be paid by seller to buyer. Fees and expenses to be paid by 
the loser. 

That additional American parcel and cargo contract forms for maize should 
be issued upon European " rye terms," and that the A^arious associations be 
requested to withdraw the American " rye terms " clause from their existing 
contract forms. 

That this committee requests the London Corn Trade Association to withdraw 
their German translation of contract form No. 16 in so far as it concerns maize. 



62 FLOUR AND WHEAT TRADE. 

MILLING METHODS. 

COST OF PRODUCTION — STANDARD OF LIVING AND RATES OF AVAGES. 

Heretofore I have referred only briefly and in a general way to the 
practical side of the milling of wheat in the United Kingdom. The 
mills produce varying types and qualities of flour, partly because of 
the varying tastes and requirements of the different sections and 
partly because of the lack of uniformity of supplies, the major part 
of which may come from the United States for a time, again from 
Russia, or later from Argentina, India, or Australia. The problem 
of maintaining a uniform standard of quality in his flour under such 
conditions of varying raw material has called forth a high degree of 
skill and judgment on the British miller's part. It does not follow 
that he makes better flour than American millers. He has been forced 
to exercise a proficient degree of scientific knowledge in order to hold 
his own against his American competitor, to whom natural conditions 
have given better opportunities for selecting the best wheat. The 
point of better and more uniform and more regular supplies of raw 
material should be made the most of by American millers in the fight 
for increased trade. The British miller can make good flour where 
his trade requires it. because he has been obliged to do so, and he has 
succeeded in combining, through his scientific proficiency, some very 
inferior wheats with good varieties in the production of what appear 
to be really high grades of flour. He has further succeeded in in- 
ducing the public to pay relatively higher prices by several shillings 
per sack for his best grades over some very well-known and repre- 
sentative American brands of flour. Thus lie has demonstrated that 
he is a very good practical miller and, which is of more importance, a 
very shrewd merchant. Still, the fact remains of severe and remu- 
nerative competition, seemingly growing more keen among the Brit- 
ish mills themselves rather than against the American product. 

COST OF PRODUCTION. 

Tlie higher cost of production made necessary by the unfavoring 
natural conditions is not overcome, but rather emphasized, as I see it, 
by the elaborate construction and intricate machinery necessary to 
produce high-class finished product from indifferent and ordinary 
raw material. After all, the popular grades yielding the relatively 
high prices and sustaining the industry are high in quality more in 
appearance than in intrinsic merit. A flour is valuable as it Avill pro- 
duce value to the baker. Advertising does not make it so, though 
advertising may influence favorable opinion in the absence of efforts 
to overcome its effects. Demonstration of the claims of American 
mills following the introduction of high-class American flours, would 
conclusively establish the fact of their superior bread-making quali 
ties. The superiority of the wheat from which the flour is made 
should be brought home to the buyers by proving up to them through 
special demonstration the merits of the flour. This would offset the 
prevalent belief which noAv accepts the statement so persistently 
spread before bakers that, having modern mills of huge cost, the 
British miller must necessarily make better flour than anybody else. 
The best he can possibly make in large and uniform volume is not 
nearly so valuable intrinsically as the regular high-class product of 
the well-equipped American mill. The latter's production for export, 



UNITED KINGDOM. 63 

being a surplus, can be sold at a minimum of profit, while the British 
miller can not further reduce his cost nor his average selling price. 
He has, by his excellent facilities on the one hand and keen competi- 
tion on the other, reached the limit in these respects. 

RECOVERY or LOST TRADE. 

As I look at it, the American has only just begun to fight. He has 
won a large trade in Great Britain with his '' export " grades of 
flour, and now these have been to the extent of, say, ttO per cent dis- 
placed. Even if 50 per cent of trade has been lost, it is not beyond 
redemption. It has been diverted rather than lost, and the means 
lie within the practicable facilities of our mills to regain the greater 
part. Higher grades and improved deliveries will accomplish this. 
If sacrifices on price are found necessary to bring about increased 
American flour production, millers shoulcl make the sacrifice on high 
grades of flour. They should be better content to take no profit for 
a time on a high grade that will establish itself in favor and furnish 
its own advertising by sheer force of merit than to take a small profit 
on an ordinaiy patent grade wdiich will gain no friends because it 
possesses no special excellence of quality. Flour to sell readily must 
have something about it to attract the good will of buyers. This 
may be overlooked as a trade axiom in times of active demand, but 
it is true, as time will prove. I decidedly am of the opinion that one 
of the requisites to successful foreign trade, aside from the honest 
fulfillment of contracts, in most lines of manufacture as well as of 
flour, is to send abroad the best that can be made rather tlian some- 
thing that will just, or barety, meet the competition. Nowhere else is 
excellence of quality so potent an influence in the building up and 
extension of trade as when the consumption of the article is thou- 
sands of miles away from its production. Then, if ever, superior 
facilities and better natural resources count in building reputation, 
attracting new bu3^ers, and reducing selling cost. It means expense 
and sacrifice to build up trade anywhere, but foreign trade, in Great 
Britain and on the continent of Europe, can best be maintained and 
more easily brought to a remunerative and self-sustaining basis if 
developed on the highest qualities possible to produce. To build up 
such trade on mediocre goods will mean ultimate displacement. 
These the foreign manufacturer can equal. Our best he can not ap- 
proximate, much less surpass, because of natural conditions, not only 
as to flour but as to many other products. 

SURPLUS MILL OFFALS OPERATION OF BRITISH MILLS. 

In flour milling particularly the marketing of mill offals abroad, 
where the flour trade is sought to be expanded, should be studied and 
worked out to a successful conclusion, for they go hand in hand in 
the proposition. At the risk of exciting criticism for repetition, I 
again urge that the surplus mill feed made in the production of sur- 
plus flour should be marketed abroad during the building-up period 
where it will have the most influ-ence in weakening the foreign com- 
petitor. A frontal attack with high-class flour, and a flank movement 
with any surplus of feed products, will certainly do much to weaken 
British competition, since one of its strongest recourses is the high 
price it obtains for mill feed, against which America is offering no 
resistance. 



64 FLOUR AND WHEAT TRADE. 

As to the practical working of flour mills in the United Kingdom, 
much less is generally known than of similar concerns in the United 
States. The conservative spirit that prevails scarcely admits of such 
free interchange of experiences as are common in America. I can 
not discover that there are any specially valuable trade secrets to be 
guarded, but still a general reticence or exclusiveness seems to exist, 
jiot only as to visiting flour mills but other manufacturing plants as 
well. Nevertheless I was enabled to visit and freely investigate the 
workings of two representative mills of large capacity in widely sepa- 
rated districts, whose trade and methods conflict as little as any two 
mills in the Kingdom. Both have proved very profitable enterprises. 
One has been in operation many years, but has kept pace with ad- 
vanced methods. The other, built in recent years, is one of the show 
mills of the country. In it nothing seems to be lacking from any 
point of view as to location, construction, or equipment. 

A MODEL MILI/. 

In referring to this mill, I do so because it may be of interest to 
millers to know something in general of its methods, apparent to a 
visitor, since it is claimed to be and probably is up to date in every 
respect from the British miller's standpoint. It is entirely of cement 
construction, floors as well as side walls, and partitions all reenforced 
by steel stays. For the most part the mill proper is seven stories in 
height, the wheat storage and preliminary cleaning being in an ad- 
joining building, which from the outside appears to be a part of the 
general construction. The elevator and storage portion devoted to 
wheat is carried up a considerable height above the mill and with a 
fine architectural effect. The flour storage, of several floors in extent, 
on the end of the mill building proper opposite the wheat elevator, 
appears as a part of the main structure, and adds to the well-balanced 
appearance of the property. In the mill building are two entirely 
independent mills. One, of a capacity of 40 to 60 sacks (280 pounds 
each) per hour, has been in operation for about two years. The other, 
designed to produce 50 to 60 sacks per hour, is in course of construc- 
tion. The plant will then have capacity to turn out 15,000 sacks, or, 
say, 21,000 barrels, per week. The location and foundation are said 
to have cost $100,000, and the entire cost is represented to be when 
completed somewhat in excess of $1,000,000. The construction is so 
planned that a duplicate plant may be added, should such become a 
future requirement. Points of peculiar interest to American millers 
are that this model mill does not wash or soak its wheat, does not 
bleach its flour, and does not make any low grade. It is equipped 
with all the known labor-saving appliances, automatic coal handling 
and stoking devices, loading slides, marine elevators, conveyors, and 
mechanical arrangements for handling supplies and products, and yet 
a force of fully 200 men and boys is necessary for the production of 
the 21,000 barrels weekly output. This does not include a large office 
force and the salesmen required in the distribution of the output. 

GRADES OF ELOUR PRODUCED AND -WHEAT USED. 

I was not permitted to know the percentages of the three grades of 
flour produced, but from their appearance upon comparison would 
guess them to be about equal in this respect. All were beautifully 
dressed, and in point of color and finish the lowest grade might pass 



UNITED KINGDOM. 65 

for a pcatent if no other tests were applied. The yield in flour of a 
given quantity of wheat could not be ascertained, but since all the 
product usually passing into low grade is allowed to remain in the 
offals, the milling can not be very '' close," as Americans understand 
the term. Feed values are so high that very rich feed is made not- 
withstanding the demand for low-grade flour, wdiich, in London, is 
active, but is even better by a shilling a sack in the Netherlands 
trade. 

As to the wheat used in this mill, it was largely Argentine of the 
softer variety, with a considerable percentage of Pacific coast and 
some English grown. These two latter grades are very large and 
plump, but the last named may contain considerable smut, removable, 
however, by the American process of dry cleaning employed in this 
as in some other mills of large output. 

As to cost of manufacture, wages, varieties of wheat most in favor, 
and proportions of each preferable and generally used, I have the 
authority of one of the recognized technical experts in British mill- 
ing, who kindly went into the subject fully at my request and Avhose 
statements I afterwards verified by conversations with practical 
millers and mill owners. 

WHEAT-MIXING METHODS. 

There is no fixed rule for wheat mixing because of varying condi- 
tions both as to supply and character of flour required in different sec- 
tions. Many smaller mills depend largely upon English or Irish 
grown wheat, while others using largely of native wheat mix in for- 
eign wheat or blend foreign flour with their own product. Most of 
the large mills, however, having to depend mainly upon foreign 
wheat, aim to have full 40 per cent of their wheat of a hard variety, 
which for the past season has been either American or Canadian, with 
an equal percentage of Plate (Argentine), the remaining 20 per cent 
being generally made up of equal parts of English and Pacific coast 
or Australian wdiite wheats. Similar percentages of Indian and 
Russian wheats, with corresponding characteristics, when available, 
are used. Other countries of minor importance contribute to the 
supply and are used as they may be obtainable to make up the blend 
of wheat approximating that above described. The rule of about 40 
per cent hard wheat is pretty generally adhered to as producing best 
results and the balance is made up as may be best and most cheaply 
available. With a plentiful supply of good native and foreign white 
wheat and plenty of Argentine to absorb surplus moisture, durum 
wheat specially tempered and prepared is used freely by some mills 
up to 25 per cent. One mill well located for getting English wheat 
the past season has obtained good results by using 50 per cent Mani- 
toba, 25 per cent durum, and 25 per cent English. Another has run 
much of the time on 50 per cent of a mixture of about equal parts 
No. 1 and No. 2 Manitoba, 20 per cent of No. 4 and No. 5 Manitoba, 
and 30 per cent Plate. In 1908 the supply of Plate, Pacific coast, 
and Australian wheats was decidedly scarce, and a revision of per- 
centages and varieties will soon be necessary. More Americans, 
especially Kansas hards, are expected to come injto use. 

2304—09 5 



66 FLOUR AND WHEAT TRADE. 

PROPORTION OF FLOUR EXTRACTED. 

The ordinary extraction of flour aimed at in milling, under present 
conditions of feed demand, is not above 70 per cent in flour of the 
weight of wheat sent to the rolls. In many cases it must prove to 
be less. The cost of 100 pounds of wheat is sought to be offset by 
the sale value of 70 pounds of flour, leaving the feed offals to pay for 
the packages, cost of production and sales expense, including the 
profit on the transaction. The feed naturally dividing into bran 
and finished middlings is subdivided by separating the broad from 
the fine bran, and in cases making a similar separation of the finished 
middlings. For the home trade the broad bran may be specially 
treated by rolling between large rolls of the same speed, thus making 
it exceedingly wide up to twice the size of the flakes of rolled oats 
as ordinarily produced. No such feed product is generally made by 
American mills. Eolled out in this manner the bran packs closer 
in sacks than when not so rolled, and commands the equal of $5 per 
ton more than when not so treated. That so many feeders will pay 
a premium for what is simply a fad with no real basis is remarkable. 
It might be overcome either by American mills increasing the supply 
of broad bran or by the spread of such scientific information among 
users as would bring finer bran into greater demand. After the 
broad bran has been separated from the fine the latter is either 
ground much finer and blended with middlings or sold on its merits 
or exported to Germany and the Netherlands, Sweden, and Norway. 
A large amount T5f straight-run bran is also exported to the con- 
tinental countries named. Offals of all kinds have been at practically 
winter prices all summer, which has enabled mills to make lower 
prices on flour than otherwise would have been possible. 

CHARACTER OF LABOR SCALE OF WAGES. 

Mill labor as supplied by skilled workmen is ordinarily for night 
and day operation, divided into two shifts of twelve hours each. 
Warehousemen and ordinary laborers as well as millwrights gener- 
ally work ten or ten and a half hours per day. The latter period 
of time I find very general, eleven hours being put in at the plant, 
but a half hour being taken out for the midday lunch. 

A " ten sack " mill (meaning ten sacks per hour, 280 pounds each, 
and equaling a mill of 350 barrels, twenty-four hours daily capacity, 
as reckoned in America) will ordinarily employ about the followmg 
force, at about the indicated rate of wages, in the larger cities : 



Per week. 

1 superintendent $19. 00 

1 foreman 9. 60 

2 rollermen, each 8. 40 

2 purifier men, each 7. 20 

2 silkmen, each 6. 24 

1 top man 6. 00 

3 packers, each 6. 00 



Per week. 

1 warehouse foreman $10. 80 

2 warehouse screenmen 6. 24 

2 warehouse helpers 4. 80 

6 to 12 common laborers (depend- 
ing on location, etc.), each 4. 80 

2 engineers 8.40 

2 stokers 5.76 



A mill of 15 to 20 sacks per hour capacity (say 500 to 700 barrels 
daily capacity) would employ about the same number of skilled mill, 
warehouse, and engineroom men, but would need additional helpers, 
packers, and common laborers, from 3 to 10 in number. As the 
capacity increases the force of help is increased in nearly the same 
ratio up to 20 sacks per hour, employing 35 to 40 men. A mill of 
35 to 50 sacks will employ nearly double the force of skilled work- 
men in a 20-sack mill. One mill of about 50 sacks per hour capacity 



UNITED KINGDOM. 67 

(1.600 barrels daily) which I visited had over 150 men in and about 
the plant, not including teamsters, and I think this is not far out of 
the way as representing the labor force of mills of this size. Fore- 
men in the mills exceeding 700 barrels daily capacity get as high as 
$19.50 per week, and in such mills two or more of such men are em- 
ployed. Superintendents of such mills are liberally paid, their sal- 
aries running from $1,000 per year in the 1,000-barrel plants to 
$5,000 in the largest. The milling concern of greatest capacity in 
the United Kingdom, making in busy times full 250 sacks per hour 
(about 8,500 barrels daily), in its several plants, gives employment 
to 1,000 people, including commission salesmen, of which it has some 
250. This, like some others, has its own barges and coasting steam- 
ers, teams, and warehouses for distribution of flour and feed. 

THE OFFICE FORCE HAULING AND DELIVERY. 

The office force of the ordinary 300-barrel mill (daily capacity) 
does not vary from that of the similar sized American mill. There 
is the owner or manager with possibly official aids, one or two, and 
generally two or three clerks. The latter get $4.75 to $5 per week. 
Traveling men on full pay, not including expenses, which are about 
the same as in the United States, get $14 to $16 per week. Salesmen 
working on commission are ordinarily paid 6 pence (12 cents) per 
sack, equaling about 8 cents per barrel. With the larger mills the 
conditions vary so as to the office and sales force that no definite 
estimate can be made as to the total cost per barrel for such items, 
but the rate of wages is about the same as with those quoted, and the 
number of employees equally as liberal. Economy in labor, except 
as to the rate paid, does not seem to have been arrived at as closely 
as in most American mills. In most mills, and in some of the large 
mills particularly, a system of promotion on merit is followed out 
which tends to retain the services of the really valuable employees. 
A mill employee once losing a position would probably be forced to 
take a place much lower in grade elsewhere. 

Teaming and delivering are generally let out on contract, but are 
sometimes done under the mill's supervision. One concern keeps 40 
horses, employing about a dozen men as teamsters, the latter taking 
care of the horses they use under the direction of a stable boss, who 
does all the buying and selling of the horses. In such large estab- 
lishments the feed, except the hay, is regularly specified and daily 
weighed out for each horse and for each meal. 

STANDARD AND COST OF LIVING. 

The standard of living among the common laborers about the flour 
mills of Great Britain is decidedly below that of the same class of 
labor in the United States. It can not be otherwise with wages at 
half or less than half the American standard, with meats, bread, 
potatoes, and rents on practically the same basis as have ruled in 
the United States in recent years. Clothing and shoes cost slightly 
less, though ordinary cotton goods cost as much in England as in the 
United States. As a rule the common laborer pays out nearly half 
his wages in rent. None of them own homes, though in small towns 
the laborers' houses may be part of the mill property, and in such 
cases the rent is nominal, $40 to $50 per year, and tjfie condition is 
further relieved by the use of small garden patches which, however, 



68 FLOUR AND WHEAT TRADE. 

with the favoring climate, are far more productive than in America. 
The disposition is toward thrift and close economy arising from 
necessity, and not because of any possibility of saving. So great is 
the rent drain upon the common laborer in the cities that some 
managers have arranged for homes for the men and their families 
upon property owned by the milling concerns and leased to the em- 
ployees at $1.50 per week, which is said to pay about 5 per cent on 
the investment. AVliere provision of this kind is not made rents of 
$2 to $4 per week must be met. Frequently 50 cents por week is paid 
out for accident and death insurance very generally carried by the 
better class of common and skilled labor. Often provision to the 
extent of 50 to 75 cents per week must be made for aged relatives. 
To the man earning when employed but $5 to $7 per week, with fixed 
expenses seldom less than $3 per week for rents and necessaries other 
than food, it may be assumed that the food supply for the two to six 
people constituting the average family is far from adequate in the 
American sense of the term. With the skilled mill employees earning 
$7.50 to $9 per week the case is improved only to the point of placing 
such mechanics on about the level of the very ordinary grades of 
laborers in the United States. Superintendents and foremen are well 
paid, and their standard of living is quite equal to similar occupa- 
tions in America. Positions requiring administrative or executive 
ability seem generally to be filled by men as well qualified and as well 
paid as we would expect to find in our own country, but with all 
minor places in office or mill it is quite different. No matter how 
intricate the work or how skillful the man who does it, it is " work," 
and the workman must take the consequences of his position, in- 
cluding the low wage his humble place in society calls for. 

CHARACTER AND QUALIFICATIONS OF MILL LABORERS. 

The average flour-mill employee is a capable, sober man. Both 
qualifications go with the occupation. Superintendents are held re- 
sponsible for the conduct of plants and will not permit of laxity in 
regard to performance of duty or sobriety. Rigid rules respecting 
sober habits among skilled workmen in most industries, as well as 
milling, have in later years greatly reformed the old-time custom of 
frequent and excessive drinking. No excesses of this nature are toler- 
ated here any more than in any well-regulated factory in the United 
States. It is conceded by those in position to observe that wages of 
mill operatives are much too low considering the intelligence, skill, 
and attention required, but there appears no way open for any im- 
provement. The men themselves are apparently content, since in 
flour milling they have of late years had constant employment, while 
in other trades much lost time has occurred. Never having had the 
minor luxuries which American workingmen are used to, their modes 
of living do not call for such, nor would wages permit of indulgences 
in anything outside of actual requirements, no matter how much de- 
sired. By practicing the closest household economy as to food and 
dress, eliminating useless expenditures for cigars, drinks, public en- 
tertainments, excursions, and the like, the laboring man can make 
both ends meet, but he can make little or no provision for the future. 
Perhaps his contentment comes from the knowledge that he is after 
all doing better than his father before him, for wages now at $5 to $7 
per week are said to be 25 per cent higher than they were twenty 
years ago. 



** UNITED KINGDOM. 69 

CONDITIONS REVIEWED. 

BUYING OF WHEAT AND FLOUR CHECKED. 

A hastily taken review of the trade between American millers and 
the flour importers of the United Kingdom offers somethmg of 
satisfaction but much of disappointment to all concerned. Twelve 
months ago, and for a period of six months from May 1, 1908, there 
was evident a renewed interest in American flour and every prospect 
of a mnch larger export for the present crop year than for the year 
preceding. Indeed, the volume of purchases soon after the American 
harvest indicated something like the old-time free buying, and this 
was particularly true as regards hard-wheat flours. The disappoint- 
ing conditions have resulted from the fear that overtook the trade 
in Europe, inspired by the evident manipulation of wheat prices 
in America that began to attract attention as early as October, 1908. 
It was not that the world's wheat supply did not indicate some justi- 
fication for an advance in prices that inspired this fear, but it 
came about by the knowledge that, whatever the true basic price of 
wheat might be, there w^as nothing in America to prevent undue and 
sudden advances or unexpected and quick declines at the hands of 
whatever powerful interests might be in control of the Ameri- 
can speculative markets. So the trade in flour lagged when, under 
normal conditions, buying would have been continued with reasonable 
confidence. 

The market for American wheat itself suffered even more than that 
of flour. No merchant could safely enter into large contracts once 
it became known that a " corner " in America was probable or even 
possible. Numerous buyers have given every assurance that had 
there been no apprehensive element injected into the American wheat 
markets last- fall and winter the buying of American flour would 
have been materially in excess of recent orders. The quality of flour 
that arrived in Europe was most excellent. Millers have evidently 
striven to maintain their quality at a high standard. The delivery 
of all shipments by steamship companies has, since early in the fall 
of 1908, shown marked and satisfactory improvement. Importers 
have had little cause for complaint as to delayed shipments the 
past six months. This, indeed, is a great gain. 

VIEWS or A BRITISH MERCHANT. ' 

Touching general conditions of interest in the flour trade between 
the two countries, I attach herewith a letter from one of the very 
influential importing houses of London. I offer this letter because 
upon all the points made in it there is given expression of the general 
sentiment of buyers in the United Kingdom, all of which will be 
interesting to manufacturers of flour. 

London, May 5, 1909. 

Dear Sie : Referring to our conversation and to yonr request that I sliould 
write you on the subject as to what I think would help to improve the fiour 
trade between your country and Europe — 

1. I take it for granted that it is impossible to prevent speculation in wheat 
by moneyed outsiders on your side. It is, of course, patent that the price of 
wheat is often run up considerably beyond its real value for milling purposes 
by speculation, which must not only hurt the mills in your country but gives 
the flour-export trade a bad setback, as the mills on your side are thereby 
unable to quote competitive prices for their flour on these markets; and there 
is nothing so bad for a trade as having its brands temporarily removed from 
the market. 



70 FLOUR AND WHEAT TIRADE. * 

2. There is the fact that durum wheat is being grown in the Northwest now 
in some considerable quantities, and I am afraid some millers on your side are 
attempting to make cheaper flour by mixing this wheat in with their regular 
spring grindings, and there is no doubt in my mind that the deterioration of 
certain brands of spring-wheat flours, causing loss of confidence on this market, 
has been caused by even a small quantity of durum wheat being used in the 
milling mixture. At the same time there is an even more serious objection to 
this wheat being grown in the Northwest. I was lately over in your country 
and examined a great number of samples of wheat on the Minneapolis Exchange, 
and was astonished to find that in almost every sample there was either a 
small percentage of durum wheat or some of the grains of spring wheat showed 
clearly a cross between hard spring and durum wheats. The conclusion I came 
to was that pollen from the bloom of durum wheat had been carried by the 
wind broadcast and had fertilized the hard spring variety, and I look upon 
this as a most serious question should it be allowed to continue for even a few 
years more. I need not tell you that the demand for Minneapolis and Minnesota 
flours in Europe is based upon the amount and quality of the gluten which they 
possess, and unless the millers in that district can obtain this wheat without 
admixture with or crossing by durum wheat the demand for their flour, on this 
market especially, would be very badly injured. 

3. But the most important point, which I can not too strongly urge upon your 
consideration, is the importance to the American milling flour trade, espe- 
cially in the Northwest, that Manitoba wheat should be allowed to come over 
the border free, so that your mills can grind it into flour. The Canadian crop 
is not being handled in so competent a fashion as is possible in your country. 
Something like half to two-thirds of the northwest wheat is marketed and 
rushed to seaboard via the lakes during the two months which elapse from the 
time of harvest and the closing of navigation, and this wheat is offered to 
European markets at a much lower price than it would be if it had an 
outlet across your border. It is not diflicult to show that the influx of Manitoba 
wheat would not reduce the average price of wheat in your country, as it might 
be supposed to do ; that it would, if anything, be in favor of your farmers get- 
ting a better price for their wheat, because if the Canadian crop could be 
handled on large exchanges like Minneapolis, Chicago, and New York the 
Canadian farmers would not have to take such a low price as they have to do 
under present conditions, when they dump it down in this country in enormous 
quantities during the months of September, October, and November, resulting 
in knocking down the price of wheat on this side, reducing the price which we 
can pay for American flour, and allowing our port millers to monopolize the 
trade. In fact, looking at the subject from all sides, it seems to me of great 
importance that this matter ought to be seriously considered by your department. 
Each year is encouraging large mills being built in the northwest of Canada, 
and our markets will some day be flooded with cheap Manitoba flour. If, how- 
ever, an outlet could be given to Manitoba wheat in the United States the 
milling industry in your country would be put on a much better footing for 
supplying Europe with flour. 

The farmers and wheat dealers in Canada are forced to market the greater 
part of their crop during the first three months, because in Canada they grow 
something like 20 bushels of wheat per head, whereas in America the farmers 
grow practically only about 10 bushels per head. The Canadians therefore 
want only about half their crop for their own consumption, whereas in your 
country it is to the interest of all concerned, and especially the milling industry, 
to keep the greater part of their wheat crop in hand and that America should 
ship its small surplus over to this country in the shape of flour. 

Trusting that this may be of service to you, 
I am, dear sir, yours, very truly, 

Sydney T. Klein. 

Mr. M. H. Davis. 

Notwithstanding the untoward conditions, it is gratifying to note 
that the enforced falling off in American shipments of flour to Great 
Britain, arising from the causes above mentioned, is proportionately 
much less than the loss of trade in wheat itself. It should be gratify- 
ing to note the increased relative strength of the flour trade in this 
respect. 



GERMANY. 
FLOUR INDUSTRY. 

AGRICULTURAL INFLUENCE — PRODUCTION AND CONSUMPTION. 

Farm owners in Germany, as a class, differ in political and social 
influence from similar classes in other countries, and in particular is 
the difference marked compared with United States farmers, without, 
however, reflecting adversely on the latter. In Germany the farms 
are largely owned and managed by wealthy, titled, and landed pro- 
prietors whose operations extend over wide sections of territory, often 
embracing many thousands of acres, containing within themselves 
villages for the homes of laborers, shops and factories, distilleries, 
mills, and refineries for converting as much as possible the raw prod- 
ucts of the soil and forest into finished goods fit for consumption and 
use. Societies with semiofficial authority exist throughout the Em- 
pire, affiliated with various government bureaus and supported by 
strong corps of scientists and experts, whose duties in part consist 
in aiding to bring up to the very highest state of efficiency that par- 
ticular line of agricultural economy and production to which their 
efforts may be directed. And such direction is systematic and to a 
great extent obligatory upon the part of those interested. The result 
in agricultural lines is increased productiveness. The soil and its 
products are made to yield as freely and as much of value as scientific 
supervision can exact. So the influence of anything agricultural 
extends broadly and involves more people and people of wider intelli- 
gence than is ordinarily the case elsewhere. There is a unification 
and concentration of influence, political and otherwise, growing out 
of this systematic or paternal advancement of agriculture which gives 
it prominence beyond any other in many respects. 

ALLIANCE or FARMERS AND MANUFACTURERS. 

No industrial body is more closely allied to the agriculturists 
than are the manufacturers of flour. The imposition of grain duties 
met with their opposition, and naturally so, for while an advance in 
home-grown raw material might be countered by higher prices for 
flour for domestic trade the business that had been built up by mills 
best located for trade with the people of other nations would be 
handicapped to the point of prohibition. Hence, as there were over 
30,000 flour mills throughout the Empire, employing from 2 to 50, 
or in some cases 100 or more workmen, and about 11,000 small mills 
operated solely by their owners, something had to conceded to allay 
the opposition these interests naturally aroused. There were also 
many grain-shipping firms antagonized by the exactions of duties 
on imports, much of which was temporary in character, the final 
destination being other foreign ports. Therefore, in 1905 an amend- 
ment to the duty law went into effect giving millers and shippers 

71 



72 FLOUR AND WHEAT TRADE. 

a rebate, pound for pound, of as much duty when exported as would 
have been paid upon the grain had it been imported. This law not 
proving entirely satisfactory was later amended, the change taking 
effect March 1, 1906. 

The enactment of the drawback provisions was probably largely 
due to the exertions of millers, whose organization is national in its 
scope and is supported by the heaviest financial interests in the busi- 
ness of milling. At present this national association has 5,700 mem- 
bers. It was organized in 1867. Its first president, Mr. Joseph J. 
van den Wyngaert, of Berlin, 82 years of age, has served continu- 
ously in that capacity for the forty-one years that have elapsed since 
its formation. Younger shoulders are now bearing the brunt of the 
duties involved, and this association continues to carry an influence 
dignified and effective. 

DRAWBACK ON EXPORTS OF GRAIN. 

The policy of allowing a drawback on all exports of grain seems 
unwise to many in the trade. It undoubtedly operates to deplete the 
stores of home-grown product. Under such a system no large accu- 
mulations are likely to be made, or if made, to be long maintained. 
The near-by markets of other countries, always buyers of grain, 
readily absorb what apparent surplus Germany has to offer, and the 
traffic is facilitated by the low- water rates of transportation and the 
size of the drawback, which admits of a wide opportunity for adjust- 
ing prices to meet the market. Speculation in grain is under govern- 
ment restriction, less now than in recent years, but still sufficient to 
prevent manipulation, or the accumulation of large quantities. Hence 
there are no centers of storage or large elevator systems, as exist in 
the United States. There is therefore less uncertainty as to values, 
and the milling business is less disturbed than where conditions at 
times prevail, as in the United States, to make wheat worth more to 
speculate with than it is to grind into flour. 

These factors of limited speculative influence and drawback of 
wheat duties on such flour as may be sent abroad have resulted in 
permitting German millers, notwithstanding the duty they may pay 
on imports, to feel a sense of security in the permanence* of their 
industry. Therefore it has grown rapidly in recent years. It has not 
only retained its former hold on foreign markets, but has every hope 
of increasing its influence abroad while building up trade and prob- 
ably increasing the consumption of wheat flour at home. Not to be 
overlooked in importance is the appreciation of the feeding values of 
mill offals on the part of German farmers, whose willingness to pay 
full prices, justified by the high intrinsic merit of such feeding stuffs, 
is a strong support to the industry. Here again is forcefully demon- 
strated a result of better and more general knowledge as to the best 
foods for fattening stock and for dairy purposes, serving the mutual 
interests of farmer and miller. 

CAPACITY AND CONDITION OF GERMAN MILLS. 

In point of capacity, mills in Germany vary as in the United 
States. There are mills of small account, many of 100 to 300 barrels 
daily output, and numerous others of much greater size. The mills 
most likely to figure in international trade are of course those of 
2,000 to 8,000 barrels daily capacity, located mostly along the Rhine, 



GERMANY. 



73 



but there are also large exporting mills at Hamburg, Bremen, and 
Berlin. The cities of Duisburg, Dusseldorf, Nuiss, Cologne, Lahn- 
stein, Mannheim, Mulheim, Ludwigshaven, and Strassburg are all im- 
portant milling points. The 2:>roduct in most cases is both rye and 
wheat flour. The country's requirement is such that about twice as 
much rye flour as wheat flour is ordinarily made. In general terms it 
may be said that the r3^e-flour extraction of 65 per cent is divided into 
two grades of 35 per cent for the best and 30 per cent for the balance, 
or the two grades are run together to produce one standard quality. 
In wheat milling the ordinary practice is to extract 70 per cent in 
flour divided into qualities as may suit conditions. I am told that 
a division of 7 per cent for very high-class patent, a second grade of 
40 per cent, and a third grade of the remaining 23 per cent is con- 
sidered a desirable standard of milling and best suited to the greatest 
variety of trade. 

The result of the more favorable conditions in milling brought 
about by the present system has been not only to increase the number 
of large mills, but to somewhat increase the capacity of the larger 
plants already established. Some twenty modernly equipped mills 
of large capacity have been built in recent years. Some decrease in 
the number of smaller mills has also come about, to the extent of 2 to 
3 per cent of the total capacity of such mills per year. 

PRODUCTION AND CONSUMPTION. 

The average annual production of wheat in Germany from 1893 to 
1900 was 3,400,000 tons, or 125,000,000 bushels. Since 1900 the pro- 
duction has been, by years, as follows, in tons of 2,204.46 pounds: 

3,841,165 1904_ 3,804,828 

2,498,851 1905 • 3.699,882 

3,900,396 1906 3.939,563 

3,555,064 1907 3,479,324 



1900. 
1901. 
1902. 
1903. 



In the periods above referred to the rye crop has increased from 
an average of 8,500,000 tons in the seven ^^ears ending with 1899 to 
9,300,000 tons annual average for the seven years ending with 1906, 
and it was 9,757,859 tons in 1907. The statistics as to the imports of 
wheat show an increase decidedly marked, the average per year for 
the eight years ending with 1906 being 2,036,000 tons, or 74,800,000 
bushels, while the imports of 1907 were 2,634,889 tons, or 96,832,000 
bushels. For the same period the flour imports show a rather con- 
stant ratio of decline from 48,000 tons in 1899 to 29,400 tons in 1907. 
The figures include all kinds of flour and meal, the statistical reports 
not making a separation of the various kinds until 1904. However, 
as since that year the rye-flour imports have run only from 2,000 to 
3-,000 tons per year, it may be assumed that they are at no time con- 
siderable, and that the showing as to flour imports is one of wheat 
flour to all intents and purposes. 

The actual wheat-flour imports for home consumption since and 
including 1904 are as follows, in tons of 2,204.46 pounds : 

1904 23,168 I 1906 21,525 

1905 21,387 I 1907 19,675 

Of the above the United States seems to have supplied about one- 
fifth, or, say 40,000 barrels, and Austria-Hungary nearly three-fifths 
each year. The transactions at the free ports, such as Hamburg, 



74 FLOUR AND WHEAT TRADE. 

Bremen, and Lubeck, do not seem to be considered in the statistical 
records when the product imported is again exported. This will 
account for the discrepancy between the German showing and the 
United States statistics covering exports of flour to Germany. 

OUTPUT OF GERMAN MILLS. 

Inquiries naturally arise as to the causes contributing to conditions 
that bring about, in a few years, such a tremendous increase in the 
apparent requirement for wheat, while in the same period there is 
shown a falling off in the imports of flour. Have the German people 
taken to eating more wheat bread; and have the German mills en- 
tered more vigorously into the markets of other nations for. the sale 
of their flour? Undoubtedly both these questions must be answered 
in the affirmative. 

In the absence of statistical information as to the actual output of 
wheat flour by the German mills for any particular period, I have 
taken the official figures of annual crop production, to which I have 
added the imports of wheat. From the sum of these two items I 
have deducted the amount of wheat exported as officially recorded, 
the remainder being the net requirement for milling and seeding pur- 
poses. As the acreage seeded to wheat has not changed materially 
except to show a slight decline, the conclusion as to milling require- 
ments, relatively taken, may be considered as approximately correct. 
This conclusion shows that in 1907 there were required 810,911 more 
tons of wheat than the average up to 1902. This volume of increase 
is equal to 29,800,978 bushels, or more wheat than is ordinarily pro- 
duced in any one of a dozen or more of the large wheat-producing 
States of the United States, and is only exceeded by Minnesota, North 
Dakota, Kansas, and a few others making a specialty of this crop. 

This decided increase in demand for wheat finds its explanation 
in the increased construction of flour mills, the establishment of new 
milling concerns, and the increased capacity of those already in 
operation. Such additional capacity has been the outgrowth of the 
past eight years, but more especially of the last four years. The 
building of new plants has not reached its limit, as several large ones 
are now in the process of erection. 

DOMESTIC REQUIREMENTS. 

Following are the figures in tons, covering the net wheat require- 
ments of Germany from 1899 to 1907, inclusive : 

Average crop 1899 to 1903 3, 522, 000 

Average yearly imports 1, 852, 000 



5, 374, 000 
Less average yearly exports 308, 000 



Average requirement to 1902___ 5, 066, 000 



Crop of 1903 3, 555, 064 

Imports 1903 2, 124, 643 

5, 679, 707 
Less exports in 1903 347, 272 



Net requirement 1903 5, 332, 435 



Crop of 1904 3, 804, 828 

Imports 1904 2, 214, 820 



6, 019, 648 
Less exports 1904 330. 483 



Net requirement 1904 5, 689, 165 



Imports 1905 


2,482,943 


Less exports 1905 


6, 182, 825 
337, 685 






Net requirement 1905 


5, 845, 140 


Crop of 1906 

Imports 1906 


3, 939, 563 

2,090,890 


Less exports 1906 


6, 030, 453 
346, 702 






Net requirement 1906 


5,683, 751 


Crop of 1907 

Imports 1907 


3,479,324 

2,634,889 


Less exports 1907 


6, 114, 213 
237, 302 


Net requirement 1907 


5, 876,911 



GERMANY. 



75 



The increase for 1907 over the average requirement for the four 
years ending Avith 1902 is 810,911 tons, or, as above stated, 29,800,978 
bushels, a German ton of 2,204.46 pounds equaling 36| bushels of 60 
pounds each. 

EXPORTS OF WHEAT FLOUR. 

The following table gives the destination and principal quantities 
of wheat flour exported, minor quantities being omitted, covering- 
September, 1908, and the nine-month periods ending with September 
in 1908 and 1907, the quantities representing sacks of 220 pounds 
each : 



De ^tination. 


September, 
1908. 


9 months, 
1908. 


9 months, 
1907. 


Denmark 


15, 505 
13, 595 
31, 047 

3,067 
29,869 

4,184 
55,065 

6,371 


94, 104 
140, 467 
183,818 

15, 645 
138,069 

35, 527 
338, 612 

16, 066 


56, 730 
169, 304 
118 343 




Netherlands 


Norway 


11,528 

94,661 

23, 483 

149, 718 

6,706 




Sweden 


Switzerland 


Egypt 





Imports of wheat flour for the same periods as above mark a de- 
cline from 145,935 sacks in 1907 to 117,406 sacks for the nine months 
of 1908. September, 1908, shows imports of only 12,277, a still 
further falling off in ratio. Of the flour imports only about half 
pay any duty, the balance being required at the free ports for ship 
supplies or used for special purposes, which under the law exempt it 
from duty. 

Germany's average wheat-producing area appears to have been in 
recent years about 4,690,000 acres, though the crop of 1907 showed 
only 4,316,000 acres in wheat. The yield for that year is officially 
placed at 127,865,000 bushels, which is below the average quantity, 
but is an increase per acre. For the five years ending with 1906 the 
crop of wheat averaged annually 1^9,000,000 bushels. The yield per 
acre, although the soil is far less rich in natural properties than in 
the United States, is practically 30 bushels, or more than double the 
product of American farms for the same area. 

CONSUMPTION PER CAPITA. 

The consumption of wheat flour per capita per annum has been 
officially placed at 144 pounds from 1894 to 1899. With all the data 
before me I can not make it figure over 134 pounds per capita. Since 
the seed required for the crop amounts to the equal of 10 pounds per 
capita, I am inclined to think that item was omitted in the official 
calculations. Taking the crop for almost any recent six-year period, 
adding the imports of both wheat and flour, deducting for seed and 
exports, and dividing the remainder by the average population as 
computed in the official statistics, the annual consumption of wheat 
per capita seems to have run at 3.2 bushels. This, on the basis of 70 
per cent extraction for flour, would give the per capita requirement 
in flour at 134.4 pounds. It is assumed that for a period of years the 
carry over of stocks from year to year would average about the same 
and thus not materially affect the result. The average annual con- 
sumption of rye, arrived at in the same manner as above, seems to 



76 FLOUE AND WHEAT TRADE. 

be 6 bushels per capita. The price of rye flour appears in recent 
■years to average to the consumer about one-fourth less than wheat 
flour. 

WAGES AND HOUSE RENT. 

Mill operatives' w.ages in cities of the 100,000 class are about as 
follows: Skilled millers, $5.48 to $7.44 per Aveek; ordinary mill 
laborers, $4.32 to $5.04 per week; enginemen, $6.24 to $6.96, and 
stokers, $5.98 to $6.71 per week. Foremen millers in larger plants 
receive from $8.40 to $11.06 per week. In small communities the rate 
of wages will run about 30 per cent less, and in the largest centers 20 
per cent more, than the above scale. 

Rents in cities of the first and second class range from $100 to $150 
per year for apartments of three rooms and kitchen ; $60 to $130 for 
two rooms and kitchen ; $50 to $80 per year for one room and kitclien. 
In small cities the rate of rents is 30 to 50 per cent less. The ma- 
jority of the population, the middle class as well as the laboring 
classes, live in apartment houses or blocks, and this is especially true 
of residents of cities, where the individual house or home is the 
exception. 

All incomes below 900 marks per year ($214) are free of income 
and church taxes, but all incomes above 900 marks are taxed for 
state and municipal purposes from 6 to 8 per cent, varying in com- 
munities, to which must be added the church tax, which is universal 
and graded on all incomes from 1,500 marks per year ($357) up to 
75,000 marks ($17,850). Above the latter sum the tax for church 
purposes is 300 marks per year ($71.40), but the scale of cliurch taxes 
may be increased at the option of the Council of Churches and Synods 
as much as 50 per cent if needed for emergencies. The church funds 
are prorated to the various religious bodies by the council named. 
The rate for church taxes for the ordinary laborer is from nothing 
to 1 mark (23.8 cents) per year. 

Favor to laborers earning under $300 per year is shoAvn by the 
street-car companies in the issuance in some cities of coupon tickets 
at reduced rates, so that to such laborers the cost of a trip one ^Yii^y is 
not to exceed 1^ cents. 

ANIMAL FOODSTUFFS. 

MARKET FOR ANIMAL FOODS 90 PER CENT RECEIVED TRANSSHIPPED. 

Germany, whose stock feeding and dairy interests are yearly be- 
coming of greater importance, offers a ready market for all kinds of 
animal foods. The need of increasing supplies may be appreciated 
when it is understood that many forms of food for domestic animals 
are admitted free of duty, while much that is raw material for human 
food and more that constitutes finished product in manufacturing 
lines are scheduled so high in the tariff scale as to nearly preclude 
their admission into the country. Particularly is this latter regula- 
tion true as to wheat flour which, under the most favorable pro- 
vision of the law, must pay the equal of $2.18 per barrel duty. Thus 
it happens that Germany with its 66,000,000 of population can offer 
little of encouragement to American millers as to the possible con- 
sumption of their flour, while at the same time there is extended a 
welcome freedom of entry to a degree almost without limit for Avhat- 
ever of feeding stuffs and offals our millers may have to spare. 



GEKMANY. 77 

STRICT CUSTOMS REGULATIONS. 

The offals from Avlieat, especially bran, the feeds from corn, oats, 
rye, and those of rice, cotton seeds, and linseed, all are wanted in a 
constantly increasing quantity. But they must be feeds or offals in 
the strict sense of the term. If by any possibility they contain flour, 
grits, hominy, or other human food product beyond a certain fixed 
percentage, they are detained at the port of entry (where examination 
is made and chemical tests applied to all articles of such nature) 
and, if found to exceed the limit, one of three things will happen: 
The shipment will be refused free admission and must therefore be 
transshipped to some country less exacting, or it must pay a duty 
possibly as high as $10 per ton, or it must be treated to a denaturing 
process that will render it unfit for conversion into human food. 
This process ordinarily consists of mixing in coal dust, about 2 
pounds to the bag, to do which the needed apparatus is at hand at 
certain docks, made necessary by the fact that all hominy feeds must 
in any event be so treated to secure free admission. This treatment 
must be made under supervision of German customs officials. Im- 
ports would not otherwise be admitted. The cost of this operation, 
ordinarily about 66 cents per ton, is of course partly offset by the 
increased w^eight obtained by the coal-dust addition. It may be noted 
here that hominy feed if found to be adulterated by as much as 5 
per cent of cob meal must, because of a regulation which went into 
effect in August, 1908, pay a duty of $2.40 per ton, and must also be 
denatured by the coal-dust process. 

FACILITIES FOR DISTRIBUTION. 

Although America can not hope to market much flour in Germany 
proper so long as the present prohibitive tariff exists, our millers may 
well turn their attention to closer and more extended relations with 
German flour and feed importing houses. These concerns, being lo- 
cated at the principal ports, and notably at Hamburg, have estab- 
lished connections throughout Germany for the distribution of ani- 
mal feeding stuffs, and in some instances in the principal ports in 
Holland, Denmark, Norway, Sweden, and Finland, where they not 
only are important fa(;tors in supplyintg the large and increasing de- 
mand in those countries for all varieties of foodstuff's for stock, 
but they are there building up a trade in flour and cereal products 
that has already grown to surprising dimensions. The transactions 
in American flour through Hamburg importers on the 1908 crop 
must be very considerable, judging from the records I have seen ; 
and though credited to German ports, it will finally be consumed in 
the other countries named. Statistics as made up from American 
port returns are somewhat misleading as to German imports of both 
flour and feeding stuffs, owing to so much being cleared for Ham- 
burg or other " free ports " of Germany that is only temporarily 
landed there to be afterwards broken up into smaller shipments. 
Many of these are forwarded to neighboring Baltic ports other than 
German. This is true of full 90 per cent or more of the American 
shipments of flour to Germany. 

WHEAT FLOUR PRACTICALLY EXCLUDED SMALL CONSUMPTION. 

Not much need be said as to Germany's flour consumption since 
the high rate of duty precludes the sale of foreign makes, except as a 
luxury, for which indeed a small amount of flour from Hungary and 



78 



FLOUR AND WHEAT TEADE. 



America manages to retain trade. The amount of wheat flour con- 
sumed per capita must be small since it is thought by those in posi- 
tion to know that 50 to 75 per cent of the requirement for bread is 
rye rather than wheat. It is a national custom to eat rye bread. 
Even the better classes are committed to it, and the wheat flour 
millers and others interested will wait and labor many years before 
they overcome the rye-bread taste. Other forms of bread, very dark 
and coarse, made of roughly bolted rye and wheat flours, are the main- 
stay of the common people, and are generally found even at first-class 
restaurants and hotels. The desire for white flaky rolls, biscuits, 
and bread has never been cultivated in Germany to the extent of 
overcoming the old-time preference for darker and less-inviting kinds 
of bakery products. 

LrrTLE HOME BAKING. 

Not much home baking is done except among the agricultural 
classes. The bakeries are numerous and supply the need. They are 
mostly small, but there are large bakeries making ship bread and 
cracker-like goods and macaroni, though these are mostly exported. 
A large trade in these lines has been built up in China and Japan, 
and to some extent in the Levant. Sweet goods, in many forms of 
which the German bakers have reached a high state of proficiency, 
are put up in tin cans for the export trade. The German people are 
not given to pastry, speaking in a general way, and not much to 
crackers or other baldng-shop products ordinarily made from high- 
class winter-wheat flours. The flour used for rolls and bread, aside 
from rye, is mostly of the " extra fancy " winter-wheat grade, except 
that it is partly hard wheat, the home mills generally blending 
Argentine or other moderately hard wheats Avith the softer home- 
grown sorts. 

German mills are reaching out in all directions for export trade, 
and in this regard must have been very successful, judging from the 
size of the plants of modern t3^pe and the high commercial standing 
of the industry in general, considering, as must be done, the limited 
demand for wheat flour in the home markets. Most of them are 
equipped for rye milling, and it is not unusual to find this feature of 
milling requiring the greater part of the plant's capacity. 

VOLUME OF FEED AND GRAIN IMPORTS. 

Some idea of the volume of Germany's mill feed and animal food- 
stuffs requirements may be gained by analyzing the following table 
of imports into Hamburg in the years 1905 and 1906, the figures 
representing " doppelzentners," being the unit of 100 kilos or 220.47 
pounds : 



Product. 



Wheat 

Rye 

Barley 

Oats 

Corn 

Wheat flour 

Rye flour 

Wheat, rice, and corn offals 

Oil cake 

Sundry feeds 



1906. 


1906. 


5, 961, 003 


4, 146, 699 


1, 391, 322 


1,433,346 


5,734,476 


7,544,051 


2, 569, 742 


1,070,432 


6,135,598 


6,756,847 


332, 697 


514,353 


46,907 


47,316 


3,373,000 


4,071,332 


2,671.077 


2,738.458 


58,851 


36, 320 



Increase 
( + ) or de- 
crease ( — ). 



814,304 

12,024 

809,575 

499, 310 

621, 249 

181,656 

409 

698, 332 

67, 381 

22, 531 



GEKMANY. 79 

Germany's larger wheat and oats crops in 1906 over 1905 easily 
account for the decrease in imports of those cereals in 1906. The 
increase in the other items aside from barley and flour shows that 
the tendency for greater feeding-stuffs supplies is well maintained. 
The figures for 1907 are not yet published, but are promised soon. 

The imports of wheat bran into Germany are variously estimated 
by those in the trade to be in recent years 250,000 to 400,000 tons 
annually. If they are 300,000 German tons they are sufficient to take 
the bran products of mills making in the aggregate 14,600,000 barrels 
of flour per year, allowing 45 pounds of bran to the barrel. To 
make this amount of flour would require as much wheat as the annual 
average production of Minnesota or of Kansas or of Ohio and In- 
diana combined. 

FOREIGN BRAN SUPPLY. 

Argentina at present is the main source of the foreign bran supply 
for Germany. Great Britain has shipped large amounts, but Argen- 
tina does 75 to 80 per cent of the business. Other countries contrib- 
uting are the United States, Chile, the Danubian ports, Turkey in 
Asia, South Kussia, and of late Japan. The trade with the United 
States has been spasmodic. The natural preference would, I think, 
go to the United States in the matter of feed purchases. I would 
suggest that millers keep thoroughly informed on the German bran 
situation, for when the proper adjustment of prices comes they may 
make connections of great value. Mills, however, should bear in 
mind the need of continuous supplies in markets once opened to them 
and endeavor to so arrange that trade once established may be regu- 
larly furnished with the goods. It costs importers both time and 
money to get new trade interested, and it is discouraging to them to 
find the mills out of the market entirely after a few transactions have 
been put through. My advice would be to keep in the market, in a 
small way if necessary on account of home demand, but do not lose 
the connection entirely. If it is lost it may be picked up by an 
Argentina or British mill and not again be available when most 
badly needed. 

The bran preferred is coarse and flaky. The demand covers all 
varieties of this product, but the richer feeds command premiums as 
elsewhere. One soft winter- wheat mill making rich bran has a good 
Hamburg trade at $2.40 per ton over the average bran. Jute pack- 
ages are ordinarily used, and American weights should be equal to 
75 kilos or 165 pounds net. The weight of the bag should not be 
included when arriving at this figure. Particular attention should be 
directed to the packages, the quality of which should be equal to 
the strain of frequent handling and transshipment. Many arrivals 
have been the cause of loss on account of the flimsy nature of the 
packages. 

ARGENTINA LEADS IN FEEDING STUFFS INSURANCE PRACTICE. 

Argentina is so far in the lead in shipments of feeding stuffs and 
offals into Germany, as shown by the published Hamburg imports 
for 1907, that I have made some extended inquiries into the reasons 
therefor. The fact that the exporting in Argentina is in a few hands, 
and that the largest wheat exporting house there is thought to be in- 
terested in the operation of the largest mills, tends to centralize the 
business and to offer exceptional opportunities for distribution at this 



80 FLOUR AND WHEAT TRADE. 

end. The financial connections of Argentina's wheat exporters are 
well known to be very strong, as indeed they must be to handle the 
large volume of exports going from that country. The shippers of 
mill feeds there sell on seaboard bill of lading and guarantee full out- 
turn and soimd delivery at destination. These terms are attractive 
to buyers as against American c. i. f. terms, which buyers claim do 
not fully protect them against unsoundness on arrival. However, it 
should be noted here that once there is accomplished the necessary 
reform in transportation from the United States to Europe, by which 
needless delays are avoided, the preference now given to Argentina 
by the guaranteed arrival terms will be of comparatively little im- 
portance. The possible time from the United States to Hamburg is 
so much less than from Argentina that once reliable schedules are 
effected American exporters will regain the preference naturally 
theirs for various reasons. 

My attention has been directed to the practice of some American 
shippers as to their methods of insuring consignments of offals. In- 
stead of taking the insurance under the " all risks " clause which 
seems to be in favor with many American mills, the insurance is 
placed under a " free of particular average " clause as to the insuring 
company's risk, unless the loss exceeds 2 per cent of the net amount 
of the invoice. Thus under this practice there is no insurance of the 
buyer's profit and none covering the cost of freight unless the buyer 
covers himself on these items at his own expense. This he can not 
always do since a period of fifteen to twenty days may elapse from 
the time the shipment is started until the invoice and advice and 
description of shipment reach the buyer. 

The importance of getting shipments off on contract time and the 
avoidance of delays is especially felt by those buyers engaged in dis- 
tribution to interior German points as the winter season approaches. 
So much is sent out by canal and river that contracts for such delivery 
can not be shifted to rail delivery without great loss in event the 
arrivals from America are not in hand before navigation closes. 
This generally occurs about the middle of December and the closed 
season continues until the first or second week in March. The differ- 
ence between the water and the rail rate is where the trouble comes 
in. Importers may have the goods sold on basis of water rate which 
may not be to exceed 2 cents per 100 pounds for a distance of 200 
miles, whereas the rail rate may be 30 cents per 100 pounds. The 
difference in the cost of inland transportation, $5.60 per ton between 
the two methods of distribution in such a case, is of course not met 
by any possible profit, and the need of reliable means of delivery 
naturally forces itself into the situation. 

The shipment, as flour, of a low-class feed in order to secure a 
more favorable classification for export purposes would be a mistake, 
although it has sometimes been done to the loss and discomfort of 
buyers on this side. Alm^ost any form of deception in shipping is 
liable, quite liable, to be discovered on arrival, when there is trouble 
to adjust the matter in conformity with customs regulations. 

It is really remarkable the variety of stuffs used for feeding. 
Aside from what we might call the legitimate offals of wheat and 
corn, and they are man}'', there are the hulls of oats, rice, coffee, 
peanuts, and other things not so many years ago discarded as worth- 



GEE MANY. 81 

less, now worlsod up and used in their proper place and portion in 
the make-up of the animal's food. The so-called " balanced ration " 
as known in America is not wanted here, or if wanted the demand 
is for the ingredients in their natural state so that the " balancing " 
may be done here. 

STARCH IN FEEDING STUFFS ^PERCENTAGE ALLOWED. 

My attention has been directed to the expense and embarrassment 
to German importers of American corn feeds, growmg out of the 
different methods employed in the United States and Germany in 
ascertahiing the starch content. Admission free of duty depends on 
the percentage of starch. A^^hen the limit is exceeded the importer 
must ]oay the duty of 30 marks ($7.20) per ton or clenaturize or trans- 
ship the goods, Avhich also involves expense. Furthermore the goods 
if not accepted in fulfillment of contract may be subject to loss should 
the market decline. Serious complications are in any event possible 
Avhen arrivals do not comply with regulations as administered here. 

It appears that 35 per cent is the starch limit for free admission. 
American shippers endeavor to have the content of starch about 30 
per cent, so as to be on the safe side. But this content is arrived at 
hj chemical tests adopted in the United States which are different 
from those employed by the German customs officials. The varia- 
tion in results obtained by the two methods is so great that what 
passes in the United States as 30 to 35 per cent turns out, when sub- 
jected to German tests, about 50 to 55 per cent. Since the German 
test is the only one of practical value on shipments designed for Ger- 
many, it is evident that hominy feed should be anah^zed by the 
German method when intended for Germany. 

A copy of a letter recenth^ addressed to the Hamburg representa- 
tive of a hominy company of Indiana, which describes the German 
method prepared by Dr. H. Hanow. the chemist in charge of the 
Analytical Laboratory in Berlin having jurisdiction in these matters, 
is api^ended. Xo less than 100,000 tons annually of hominy feeds 
come into Hamburg alone, and with trade prospects favorable Amer- 
ican methods should be revised to conform with the German legal 
requirements in order that friction and ex^Dense may be avoided and 
the importation of American-made goods facilitated. The chemist's 
letter reads : 

I am directed by Professor Delbriick to inform you that for a long time the 
Germaii experiment stations liave not employed tlie method described in the 
second edition of the " Handbnch fiir Spiritnsfabrikation," by Dr. Max 
Maerclcer, as a test for starch. In Germany the method of procedure employed 
is the so-called "diastase method," first described in the 5th edition (1890) of 
the above work. 

In the most recent, the 9th edition of Max Maercker's " Handbucli del 
Spiritnsfabrikation," published by Dr. Max Delbriick, 1908, this method is de* 
scribed as follows: 

Three grams of the air-dry substance to be tested (in case af fatty raw stuffs, 
after the fat has been removed by use of ether) are cooked for half an hour 
with 100 ccm. of water, then cooled down to 65° C, and mixed with 10 ccm. 
standard malt extract (100 grams malt to 1 liter of water are shaken for 
two hours, drawn off, and carefully filtered). For about two hours it is set in 
a quiet place and kept at a temperature of 65° C, when it is again cooked for 
half an hour and cooled down to 65° C. Then it is again treated for half an 
hour with 10 ccm. malt extract at a temperature of 65° C. after which it is 
again boiled and permitted to cool. It is then filled up to 250 ccm. From this 

2304—09. 6 



82 FLOTJB AND WHEAT TRADE. 

200 ccm. is filtered off, inverted witli 15 ccm. hydrocWoric acid (specific gravity 
1.125) for two and one-half hours in a boiling water-bath, neutralized, and the 
solution raised to 300 com., and from this 25 ccm. is used for the determination 
of dextrose (dextrose x0.9=starch). 

By this method the total proportion of starch, the eventual dextrin, and the 
present dextrose is determined. In case the net proportion of starch is to be 
determined, the dextrin and the sugar are to be removed from the finely 
ground substance by dissolving in cold water, and the proportion of dextrose 
is to be determined separately and deducted from the figure obtained first. 

VARIOUS NOTES. 

Rice offals are always in heavy demand, as are brewers' and dis- 
tillers' dried grains and malt sprouts. Anything that can be used 
for cattle feed, if shipped for what it actually is, will generally find 
a market in Germany. 

Bran and middlings as often run together and fed in the United 
States, making a so-called " mixed feed," are not in favor here. 
Middlings are not largely used except in the first half of the year 
for 3^oung stock. Bran is wanted the year around. 

The better the German wheat and rye crops prove to be, the more 
bran and feeding stuffs are imported. This is a somewhat peculiar 
fact, but it comes about by the large exportations of these grains, 
when they are of good quality, to Sweden, Denmark, and other 
countries. Moreover when the German farmer's crops of grain are 
of good quality he can sell them at good figures, and he then has 
more money to spend on the special feeds he needs for his stock- 
raising ventures. 

The higher class of feeds, those of wheat or corn or similar feeds 
and oil meal are, of course, used in greatest volume, but there is also 
large consumption of low-grade stuff mostly of home manufacture, 
where rougher offals are worked up with peat, blood, and abattoir 
products. 

Importers are fully prepared to give all necessary detailed infor- 
mation to any wiio may contemplate opening trade on any class of 
feed, and to conduct the correspondence in the English language 
when desired. 

TRADE AT HAMBURG. 

ITS IMPORTANCE AS A DISTRIBUTING POINT LOW FREIGHT RATES. 

Hamburg, the most important port, is especially well located as a 
distributing point, not only for Baltic trade but for interior Germany 
as well. Moreover, its port facilities, depth and width of channels, 
number of slips, docks, and quays, provided with every conceivable 
appliance for handling all descriptions of freight, its modernly con- 
structed buildings for receiving and forwarding package commodities, 
its warehouses and marine and dock elevators, are all so vast and 
yet so accessible for craft of every kind, from the smallest lighter 
and canal boat to the ocean liners, that it may easily claim to be 
unexcelled by smj other port in respect to extent and completeness 
of its maritime equipment. The most modern and comprehensive 
of all these port arrangements is controlled by the Hamburg- Ameri- 
can Line. It has acre-^ and miles of quays under cover, with railroad 
tracks connecting with all interior points. 

From Hamburg, for distribution to Central Germany and a broad 
belt of territory extending southeasterly across the Empire, there are 



GEEMANT. 83 

available the Elbe River and its tributaries and connecting canals 
during the season of open navigation. These afford exceedingly low 
rates of freight, and the barges and small craft employed are num- 
bered by the thousand. 

Bremen, the second port of Germany in size and importance, com- 
mands by way of the Weser River and its branches and connecting 
canals the territory west of that covered by Hamburg in the north- 
western part of Germany. 

The populous and productive portion of the Empire lying south 
and southwest of that tributary to Hamburg and Bremen is reached 
by way of Rotterdam, Holland, and thence up the Rhine to Mann- 
heim, Germany, and other river cities for distribution, as mentioned, 
by canal and river tributaries. 

Stettin, an important port for north central Germany, reaches a 
stretch of territory up the Oder River of great importance, extending 
quite halfway across the country. 

Danzig, or Neufahrwasser as the port is called, lying to the east of 
Stettin, has an influential hold on the northeastern quarter of Ger- 
many through its location at the mouth of the Weichsel. Koenigs- 
berg-Pillau, still farther east, controls the extreme northeastern 
section. 

WATER TRANSPORTATION A GREAT HELP. 

While all these ports have rail connections to all parts of the 
Empire, such commodities as grain and feeding stuffs are preferably 
shipped by barges and canal boats, because of gTeater convenience in 
loading at ports of entry and the cheaper freight rates that are 
available for all but two or three months in the 3^ear. The extent of 
Germany's barge and canal traffic is not to be underrated, since it 
plays a most important part in transportation, reaching as it does 
nearly every portion of the Empire. 

I have called attention to these ports and their water facilities, 
in order to show how readily the importers at the port cities may 
reach widely extended trade, as well as to indicate how dependent 
the rest of the country is upon its ports. Shippers of mill feed or 
feeding stuffs of any kind as well as shippers of grain may be, 
through their importers or agents at Hamburg, in close touch with 
remote parts of Germany, as well as with the more populous centers. 
Hamburg distributers are alive to the situation, and have well-estab- 
lished connections at the other ports, and through these agencies 
thoroughly cover the country. Their importations ma^^ be handled, 
as is largel}^ the case, through Hamburg; or they may be directed to 
Rotterdam, Bremen, Stettin, or Neufahrwasser or other ports. 

STATISTICS OP IMPORTS. 

The official statistics of the port of Hamburg for the year 1907, 
recently published, present some features of interest especially to 
millers of wheat, rice, and corn. A few of the more important items 
of grain, flour, and animal feeding stuffs imported via Hamburg are 
given below with the figures, showing increase or decrease, as com- 
pared with 1906. The table is in units of 100 kilos (220.47 pounds 
each) . 

The influence of the local flour-milling industry on the wheat im- 
ports inay be observed in the rather remarkable increase for 1907 of 
3,383,464: doppelzentners of wheat, equal to 12,406,034 bushels. That 



84 



FLOUE AND WHEAT TRADE. 



this increased import of wheat was not due to any considerable short- 
age of home supplies is evidenced b}^ the fact that the receipts of 
wheat at Hamburg from the interior by river, canal, and rail in 1907 
were only 400,000 bushels less than in 1906. More than three-fourths 
of all the wheat imported came from the United States and Argen- 
tina, the former supplying 10,830,000 and the latter 10,325,000 bush- 
els of the 27,600,000 bushels imported. The money paid for the 
American Avheat exceeded that paid for the Argentine product, 
as shown by the statistical report, by 6,210,960 marks, equal to 
$1,490,000, although the quantity was only 505,000 bushels in excess. 
The Hamburg miller or importer paid on the average $1.01 per bushel 
for American wheat as against 91 cents per bushel for Argentine. 
Russia furnished 2,712,000 bushels of Hamburg's imports, Roumania 
1,740,000 bushels, and the United States Pacific coast 827,000 bushels, 
while Australia sent 670,000 bushels. Shipments from other coun- 
tries were unimportant. Canadian wheat, like all other Canadian 
products in German trade, cut but a small figure in Hamburg im- 
ports, Canada's total contribution in 1907 being but 15,500 bushels 
and none in 1906. 

The moderate increases in the import of rye and barley are more 
than offset by the considerable decrease in both oats and corn. Rye 
flour also shows a decline, although the quantity imported at any 
time is small. 

GAINS IN FEEDING STUFFS. 

It is in feeding stuffs, the offals of wheat, rice, and corn, that gains 
are shown over the previous year to an amount quite surprising when 
the increased yield of home-made feed that must have accrued from 
the larger imports of wheat are taken into consideration; and it is 
this feature, as showing the tendency to greater consumptive de- 
mand, that the attention of producers of mill offals may well be di- 
rected. The increase in the importation of feeding stuffs in 1906 
over the previous year, as previously noted, was large, but the 
increase was nearly three times greater in 1907, the gain for this 
year being 420,300,000 pounds over 1906. Some idea of Argentina's 
increased facilities for the production of mill offals may be gained by 
the tables in the statistical reports giving origin of imports, and show- 
ing that the weight of mill offals imported from that country in 1907 
was more than half that of the wheat from Argentina, which latter 
constituted more than one-third of the total wheat imports. 

The total weight of mill offals imported by Hamburg in 1907 was 
as much as the average annual import of wheat for 1905, 1906, and 
1907, and only a little less than the average import of wheat for the 
years named. 

The imports of grain, flour, and feeding stuffs at Hamburg in 1907, 
in doppelzentners of 220.47 pounds each, were as follows : 



Product. 


1907. 


Increase 
(+) or de- 
crease (-) 
compared 
with 1906. 


Product. 


1907. 


Increase 
( + ) or de- 
crease ( — ) 
compared 
with 1906. 


Wheat 


7,580,163 
1, 858, 894 
7, 709, 529 
120, 769 
6,451,713 


+3,383,464 
+ 425,548 
+ 165,478 

- 949,663 

- 305,134 


Wheat flour 


612,302 
45,107 

5,981,739 
2,862,524 


+ 97,949 
- 2,209 


Rye .... 


Rye flour 


Barley 


Wheat, rice, and corn 
offals 


Oats 


+1,910,407 
+ 124,066 


Corn 


Oil cake 







GERMANY. 



85 



EXPORTS OF FEED AND FLOUR FROM HAMBURG. 

The exports of feeding stuffs from Hamburg to other than German 
ports were of minor importance in 1907, except as to Norway, Sweden, 
and Denmark, to which countries they aggregated 42,G(S0,000 pounds. 
Up the Elbe River tributaries and canals and by rail for distribution 
to interior Germany they amounted to the vast total of 914,300,000 
pounds, valued at $10,522,000. What portion of this was Avheat bran 
can not be ascertained since the tabulation as published includes the 
rougher feeds of rice, oats, and corn with those from wheat. Possibly 
half of the volume was wheat bran. 

Wheat-flour exports from Hamburg in 1907 to all points, domestic 
as well as foreign, reached 1,954,410 doppelzentners, or 429,970,200 
pounds. This exceeds the showing for 1906 by 399,203 doppelzentners 
or, say 440,000 barrels. As in the case of feeding stuffs the distribu- 
tion to interior points is the largest single item, but the increase over 
1906 is nearly all accounted for by the growth of trade with Great 
Britain, Norway, Sweden, Denmark, and Russian Baltic ports. The 
following table will be of interest as showing the location of trade as 
well as quantities of flour shipped from Hamburg in 1907, in doppel- 
zentners of 220.47 pounds each : 



German West Africa . . 
German South Africa . 
other West African 

ports 

Egypt 

Syria 

North Africa 

Ecuador 

Brazil 

British South Africa . . 
Russian Baltic ports. . . 



952 

8,677 

4,380 
9,060 
394 
313 
247 
187 
118 
290, 997 



Great Britain 142, 889 

Norway 131,000 



Denmark. 

Sweden 

German ports 

Netherlands 

Malta 

Turkey in Europe . . 

Belgium , 

France 

Gibraltar 



121,200 

61,564 

245, 839 

8,8!0 

6, 051 

644 

330 

400 



Portugal 109 

Spain 6 

Other foreign ports . . . 236 

Elbe River, interior. . . 877, 028 

By railroads 42, 752 



Total 1907 1.954,401 

Total 1906 1,555.207 



Gain 1907 399, 194 



DRAWBACK SYSTEM. 



RELATION OF REBATE ON FLOUR TO DUTY ON WHEAT. 

The German Government seems to have adopted methods of duty 
administration particularly favorable to such German millers as 
may desire to export flour. Naturally such millers have found very 
satisfactory markets for their product in Holland, Belgium, the 
Netherlands, and Switzerland, under the existing arrangement. The 
Dutch millers and important milling firms in Switzerland have, as 
it were, risen in arms against this commercial invasion. Those in the 
latter-named country have been influential enough to secure the sum- 
moning of an int*^rnational convention to consider the case as betAveen 
Germany and Switzerland. Arbitration has been provided for and 
a full discussion of the question is expected. 

For purposes of drawback payments wheat flour is divided into 
five classes. The law assumes that in the case of wheat it is possible 
to extract 75 per cent in flour, the balance being offals on wdiich 
there is no duty. Hence 75 per cent of the weight of wheat repre- 
sented in flour is entitled to receive as much rebate of duty as w^ould 
have been paid on the 100 per cent of wheat. ' The duty on wheat 
imported is 5^ marks per 100 kilos (220.46 pounds), equal to about 
35 cents per bushel. 

The five classes of flour are : First, a patent flour, called " 30 per 
cent ; " second, a medium grade of 40 per cent, designated as " over 
30 and up to 70 per cent ; " third, a low grade of 5 per cent, desig- 
nated as '' over 70 and up to 75 per cent." These three classes of 



86 FLOUE AND WHEAT TRADE. 

30, 40, and 5 compose the entire 75 per cent extraction. A fourth 
class includes the first two classes run together and amounting to 
70 per cent of the wheat. The fifth class takes the entire straight 
run of 75 per cent, being all that can be produced from the wheat. 

INDIRECT METHOD OF PAYING THE BOUNTY. 

When exported the above classes of flour are entitled to certificates 
specifying the amount to which they are respectively entitled. The 
Government pays no cash to the miller. He must find a market for 
his certificates, and they are only available for payment of duties 
when used therefor within six months of the date of issue. But it 
should be noted as a matter of special interest that the certificates 
showing flour exported may be used for payment of duties not only 
on wheat but on all grains, many kinds of seeds, beans, peas, and on 
coffee and petroleum. Thus the certificates immediately establish for 
themselves a market value, practically as good as cash to the miller. 
The miller making export shipments and desiring certificates must 
make full showing to the customs officials and keep records open to 
their inspection, and samples of the flour exported are passed upon 
by them. 

The amount of drawback of duty accruing to each class of flour is as 
follows, per 100 kilos of flour : 

Class 1, 8.80 marks, whicli equals duty on 160 kilos of wheat. 
Class 2, 6.46 marks, whicli equals duty on 117.5 kilos of wheat. 
Class 3, 5.50 marks, which equals duty on 100 kilos of wheat. 
Class 4, 7.46 marks, which equals duty on 135.71 kilos of wheat. 
Class 5, 7.35 marks, which equals duty on 133.33 kilos of wheat. 

The advantage to the miller lies largely in the fact that there is 
nothing in the law requiring him to show that he has imported any 
wheat. He gets his certificates when he can show that he has ex- 
ported flour which conforms to the types set forth in the law, and 
these certificates are receivable in payment of duties on various com- 
modities other than wheat as well as upon wheat itself. 

EQUAL TO AMOUNT OF DUTY. 

Under the regulations, the German miller, for every 100 kilos of 
flour of class 1 exported, receives a rebate of the duty paid by him on 
IGO kilos of imported wheat. This is said to be allowed on patent 
flour only and is based on 62 per cent extraction. I can not learn of 
anything in the administration of this regulation that will prevent a 
greater extraction of patent flour from receiving the same generous 
treatment. At any rate, since the entire extraction possible, includ- 
ing all grades of flour, is not likely to exceed 75 per cent of the 
Aveight of the wheat, the provision for 62 per cent must be highly 
satisfactory to the German exporting miller. The duty on wheat is 
5.5 marks per 100 kilos, which equals 36 cents per bushel of 60 pounds. 
Thus, having paid the duty on wheat, the German miller exporting 
flour and receiving the rebate gets nine-tenths of 1 cent per pound 
for every pound of flour so exported. Just how much profit is net 
to him can not be ascertained and must depend on how he maintains 
prices at home on his feed offals and on the low grades of flour. But 
the payment by the Government of $1.76 per barrel must stimulate 
the importation of wheat into Germany if good markets can be 
found in other countries for her flour. It makes possible an arrange- 



GERMANY. 87 

ment between the exporting and nonexporting millers by which home 
prices can be maintained, the exporter supplying the nonexporter 
with such imported wheat as he may require at current home market 
price, and possibly relieving him of part of his surplus of high- 
grade product. The home market in Germany is limited for the 
high grades of flour, and it was on presentation of this fact to the 
Government that the German millers were enabled to have the rebate 
system applied to their product of " patent." On the basis of 62 per 
cent of the entire weight of wheat, the standard of excellence of such 
a patent is not especially high, being about an 85 per cent patent, 
and yet it may prove a very saleable flour. 

ADVANTAGES TO GERMAN MILLS. 

The situation is a grave one for millers in America as well as to 
those in Switzerland. I understand the latter are Avilling to concede 
the allowance of duty on 125 kilos of wheat for every 100 kilos of 
flour exported. The gravity of the case as presented to American 
exporting mills, and in fact to the millers of the United Kingdom 
and western Europe, is that the German millers are enabled, under 
good or adverse crop conditions at home, to solicit trade beyond the 
German borders and always at relatively lower prices. Their agents' 
circulars to the flour buyers in Great Britain call attention to the 
" export premium," as they term it, " amounting to 2 shillings and 6 
pence per sack of 280 pounds," or, say 42 cents per barrel, which is 
apparently the amount of bounty concealed in the drawback allowed 
by the Government on exported flour and permits of quotations being 
sent all over Great Britain that are lower than American prices. I 
know that some trade is actually being worked at both Glasgow and 
London, and it is fair to presume that other points have also placed 
considerable orders. 

SALES IN SCOTLAND. 

The German agents guarantee delivery within two and three weeks 
from date of order, under mill or private brand, in lots of 400 bags 
or over, payable cash against documents, with an allowance of 1 per 
cent. The price is based on London delivery, the quotations being 6 
pence higher per 280 pounds for Bristol, Plymouth, and Hull, 9 pence 
higher for Liverpool, and 1 shilling and 6 pence higher for Glasgow. 
So far the Glasgow purchases of German flour seem to have been con- 
fined to a very few houses. There may have been so much as 1,000 or 
1,500 sacks per week reaching this market for some months past. 



BELGIUM. 

EFFECT OF CUSTOMS DUTY I^IPOUTS, EXPORTS, AND HOME CONSUMPTION. 

By legislation in 1895, Belgium dealt a severe blow to the American 
miller and farmer when, on July 12 of that year, a duty of 2 francs 
(38.6 cents) per 100 kilos (220.46 pounds) was imposed on flour. Pre- 
vious to that time American mills had built up in Belgium a trade 
amounting to several hundred thousand barrels annually. It fell 
off rapidly as a result of the legislation favoring the building of mills 
in Belgium, until in recent years 6,000 barrels represent about the 
share of American mills in the annual flour import trade of that 
country. This loss of trade in Belgium is not the only unfavorable 
result of the law, for under it the Belgian mills have been enabled to 
go more widely into foreign fields and to displace trade of American 
mills heretofore established. Whereas Belgium exported but a trifle 
over 130,000 barrels of flour in 1896, the foreign trade of her mills 
has increased to an average of over 600,000 barrels per year for the 
past five years. Her net imports of the raw material (wheat), for 
home consumption, which were well under 40,000,000 bushels a year 
in 1896, are in recent years quite above 50,000,000 bushels. Thus the 
manufacturing of the increase of 10,000,000 bushels of wheat, equaling 
2,200,000 barrels of flour annually, was transferred from American 
mills, where it might fairly be assumed it would have been done in 
large part had not adverse legislation prevented, to mills built up in 
Belgium under the fostering of the law. 

WHEAT FROM THE UNITED STATES. 

That the increased requirement of raw material has largely been 
supplied by the United States, which ought to ship flour instead of 
wheat, there can be little question. While the total Belgian imports 
of wheat for the eleven months of 1908 ended with November were 
slightly over 63,000,000 bushels, of which about 22,000,000 were again 
exported to Germany, Holland, and other countries, a quantity no 
less than 20,000,000 bushels came from the United States, as shown 
by the official records. Because of its superior qualities for flour 
making, there is no doubt but that the greater part of this American 
wheat supply remained in Belgium to be made by her mills into 
flour to again come in competition with American mills' product in 
Holland, Great Britain, and other countries in Europe. 

So much of all the various commodities imported into Belgium is 
again exported that statistics must be analyzed with more than ordi- 
nary care when ascertaining the actual consumption of the country. 
In the case of flour the duty collected for the first eleven months of 
1908, as shown by the records, is 49,276 francs ($9,510.27), as com- 
pared with 82,484 francs ($16,205.41) for the same period in 1907, 
and 89,500 francs ($17,273.50) for the similar period in 1906. Thus 
there is indicated a drop of at least 40,000 barrels imports in the 
eleven months of 1908 as compared Avith the same period of 1906. 
Before the duty was applied the total flour imports annually were 
between 850,000 and 1,000,000 barrels. 

88 



BELGIUM. 



89 



I]\r PORTS AND EXPORTS OF WPIEAT. 



The total wheat imports and exports of Belgium for the eleven 
months ended November, 1908, are given below, and also tables of 
the same for similar periods in 1907 and 1906. The countries of 
origin of imports and destination of exports are also given. The 
quantities are in quintals of 100 kilos (220.46 pounds) each: 



Imported from— 



1908. 



1907. 



1906. 



United Statea. 

Germany 

Australia 

Bulgaria 

Canada 

France 

Great Britain. 

India 

Holland 

Argentina 

Roumania — 

Russia 

Turliey 

Others 



, 523, 735 

213, 922 

6, 208 

353, 955 

665, 300 

24,710 

58, 356 

1,992 

136, 057 

,152,920 

, 845, 984 

94, 334 

18, 620 

189, 207 



3,221,910 

2,077 

708, 525 

649, 852 

146, 782 

33, 313 

8,753 

657, 530 

137, 975 

4, 742, 763 

6,011,495 

545, 500 

39, 352 

67, 052 



Total for 11 months. 
Total for the year.. 



17, 285, 300 



16, 972, 879 
18, 362, 160 



1, 966, 652 

37, 426 

360, 332 

575, 922 

163, 391 

13, 119 

16, 034 

448, 629 

140, 652 

5,483,168 

5, 778, 291 

2, 204, 585 

25, 400 

31, 683 



17, 245, 286 
18,487,024 



Exported to — 


1908. 


1907. 


1906. 




4, 685, 698 

4, 895 

136, 712 

126, 520 

1, 092, 279 

25, 130 


3, 028, 997 


2, 644, 286 


Spain 


2,853 




262, 075 

186, 874 

862, 014 

4,353 


541, 262 


Luxemburg . . 


177, 650 


Holland 


593, 851 


Others - 


31, 185 






Total for 11 montlis 


6,071,234 


4, 344, 313 
4,858,572 


3,991,037 


Total for the year . . . . 


4, 368, 616 







ITMPORTS AND EXPORTS OF FLOUR. 



The following tables show details of Belgium's imports and exports 
of flour in quantities of 100 kilos each (220.46 pounds) for eleven 
months of 1908, 1907, and 1906 and totals for the years 1906 and 1907: 



Imported from— 



Hungary 

United States. 

France 

Holland 

Others 



Total for 11 months 
Total for the year . . 



1908. 



2,346 

5, 454 

13, 835 

2,239 

763 



24, 637 



1907. 



3, 954 

6,462 

27,568 

2, 464 

790 



41-, 238 
43, 327 



5,126 
10, 818 
26, 489 

1,426 
840 



44, 699 
49, 431 



Exported to— 


1908. 


1907. 


1906. 


Kongo 


2,691 
6,187 


3,360 
7,903 


1, 980 


Germany 


6,512 


Bremen 


500 






24 


48 


Spain . 




291 




3,830 

170 

11,297 

756 

400, 767 

58 

8,961 


3,770 

62 

16, 102 

291 

313, 554 

344 

2,714 


3,949 
219 


France . . . . 


Great Britain 


30, 013 


Norway 


3,079 


Holland 


30T 250 




405 


Others . . 


3,576 




Total for 11 months 


434, 717 


348,424 
393, 226 


357 822 


Total for the year 


390, 875 







90 FLOtJR AND WHEAT TEADE. 

The Belgian wheat harvest for 1907 amounted to 4,309,500 quin- 
tals of 220.46 pounds each, or say 15,800,000 bushels. It is not high 
class milling wheat and goes into consumption as in Holland, through 
the medium of the small mills grinding into coarse flour. Much of 
this product as well as imported low grades is made into animal as 
well as human food. 

CONSUMPTION OF FLOUR. 

As the population of Belgium is not far from 7,200,000, the above 
tables of requirements and exports, together with the wheat crop 
after allowing for seed, would indicate an annual per capita con- 
sumption of 365 pounds of flour. This on the basis of 70 per cent 
extraction would require eight and two-thirds bushels of wheat, 
which is much higher in requirement than ordinarily reckoned for 
the people of either Great Britain or the United States. Observa- 
tion confirms the very general use of bread in larger than the usual 
proportion. It should be remarked, however, that in many parts 
of Belgium bread in loaves is prepared for horses and is fed to them 
at lunch time in thick slices — well baked, coarse bread. The noonday 
lunch of horses and driver is often the same in character, though dif- 
fering somewhat in quality and quantity. 

Bread of the medium and best qualities is relatively higher in price 
in Belgium than in the Netherlands. It also lacks the characteristics 
of excellence in color and texture that distinguish the bread made 
from mixtures containing a considerable percentage of American 
flour. The consumers are directly paying for the protective duty 
imposed. There is so little flour imported that the Government 
derives but scant benefit of the duty as shown by the returns for 
the first eleven months of 1908, amounting to only 49,276 francs or 
$9,510. If the duty were reduced to 1 franc per 100 kilos, the 
stronger varieties of American flour could be sold in considerable 
volume in Belgium, thus increasing the revenues very materially, 
while affording the bakers the needed strength in their mixtures, 
leading to greater yield of bread of improved quality and at reduced 
cost to the consumer. In the opinion of importers a reduction of 1 
franc in the duty would be sufficient to make a fair volume of business 
possible with American mills. The entire removal of duty would 
open the country to the inroads of direct sales by German and French 
millers, injurious alike to the possibilities of importers of American 
flour and to the trade of Belgium millers on medium and lower grades. 

FLOUR-TRADE POSSIBILITIES. 

In arriving at a proper understanding of conditions in Belgium as 
to their bearing on the flour-trade possibilities, considerable study 
of political and social affairs is necessary. There is a very decided 
connection between flour-milling and the land-owning aristocracy. 
The baking industry, on the other hand, belongs to the middle and 
working classes. Indeed, the principal baking interests are in the 
possession of the cooperative societies of laborers. It may be said 
that nearly every political group has its cooperative society for fur- 
nishing its members many forms of domestic supplies. Nearly every 
one of such has its bakery, whose operations in almost every case are 
large and very successful. Bread is supplied to members at rates 
much more favorable than could be made by bakers operating inde- 



BELGIUM. 91 

pendently. Deliveries and other details are worked out for the special 
advantage of members. Prices are fixed on a par with those of indi- 
vidual concerns, but tickets to members are issued with each purchase 
entitling the holder to a rebate of sufficient amount to absolutely hold 
trade. With their unsurpassed facilities and plenty of cash in hand 
for favorable purchases of fl®ur, the cooperative bakers are enabled 
to declare large dividends or rebates to their members, while con- 
stantly increasing their operating capital. Twice a year they pay 
their rebates to the membership. These associations are particularly 
strong in Antwerp, where there are ten of them, in Brussels with 
possibly more, in Ghent, and other large cities, and especially are 
they strong in the " Welsh " or " Wallon " districts of the south of 
Belgium — the coal, iron, and steel producing part of the country. 
Their bread wagons practically cover the thickly populated sections 
and go far into the rural parts as well. Such competitive forces are 
gradually driving out the small baker. The cooperative societies can 
underbuy him by so much as a franc per sack of 220 pounds. It is 
not unusual at times when flour is below the ordinary level in price 
for the cooperative managers to place orders for a year's supply of 
flour. Probably the largest of these cooperative societies is " Le Peu- 
ple " (The People) at Brussels, a socialistic organization, whose 
profits last year on flour deals alone are said to have exceeded 400,000 
francs. At Antwerp the " Help U Zelve " (Help Yourself) Society, 
a Liberal-Democratic cooperative, one of the most important, covers 
nearly all the needs of its members in fuel, food, and medicines, ex- 
tending support in sickness and paying funeral expenses when called 
upon. Its bread bakery is one of the largest in the city. Another 
Antwerp bakery of note is a Catholic society known as " Het Beste 
Brood." One is OAvned by the diamond workers, and still another by 
the government employees. " De Groote Bakkerij " (The Great 
Bakery) at Antwerp owns and operates a 400-barrel mill and sends 
its bread by wagons into all parts of the provinces of Antwerp and 
Flanders, and across the river Scheldt into East Flanders. 

INFLUENCE OF COOPERATIVE ORGANIZATIONS. 

Many of these cooperative organizations are represented in the 
Chamber of Deputies by members of their own choosing. It is quite 
generally thought by people in trade that the three or four majority 
now with the present Government may, upon another election less 
than two years hence, be changed to a minority, as the Liberal, Demo- 
cratic, and Socialist parties are gaining ground. The opposition to 
the present Government is thoroughly committed to free trade, and 
the cooperative societies engaged in baking would gladly welcome 
the free admission of flour. Under existing conditions they are 
largely under the trade dominion of the flour mills, with the owners 
of which they have no political sympathy. Should this opposition 
develop a majority at the next election, sufficient seats in the ministry 
might be obtained to reestablish the former free-trade policies of 
the nation. 

TRANSPORTATION FACILITIES. 

Antwerp, with a population close to 400,000, including suburbs, is 
one of the largest and best equipped of European ports. Along the 
river Scheldt, the approach from the sea, navigable for the largc^st 
ocean-going steamships, there are twenty-nine landing stations for 



02 PLOUR AND WHEAT TRADE. 

steamers of large size, covering more than 2 miles in extent. To 
the north there are eleven basins now in use and three more large 
ones in process of construction. On the south there are three basins 
for barges and smaller craft. In all there are now completed seventy- 
nine landing stations, many of them sufficient for two or more vessels 
of large size. In addition to all this there are six drj^ docks for mak- 
ing repairs. Over 3,000 vessels can be accommodated, 30 to 40 feet 
of water being available at low tide in the basins, which cover close 
to 170 acres. AntAverp's annual shipping tonnage exceeds 10,000,000 
tons. 

The three flour-importing houses in Antwerp have turned their 
attention largely to grain, but still maintain their flour departments, 
made possible by the very considerable business they do in Holland, 
to which country fully 99 per cent of their flour purchases are 
shipped. 

CAPACITY OF BELGIAN IMILLS. 

Of flour mills in Belgium there are of all kinds, large and small, 
several hundred. Less than 150 may be properly considered mer- 
chant mills of modern type. The largest of these, of 3,000 barrels 
daily capacity, is the " IJsines Remy " (Remy Mill), at Louvain, on 
the river Dyle, between Brussels and Liege. The river has been 
canalized, which, with its intersecting canals, gives the mill connec- 
tion with nearly every part of the country and at exceedingly low 
rates of freight. Similar facilities are enjoyed by other important 
milling concerns. The Remy Mill, as is the case with some others, 
has its own barges for conveying its flour and feed to destination and 
bringing return cargoes of wheat to the mill. The low cost of both 
labor and transportation is very favorable to all the first-class plants. 
The rate of pay to packers, common millers, and laborers rarely ex- 
ceeds 4 to 5 francs, or 77 to 97 cents per day of ten to twelve hours. 
The mills ordinarily run night and day, the millers' " turns" being 
of twelve hours. 

For reasons of the peculiar strength of American flours, their dry- 
ness and bread-yielding qualities, as well as their superior color, the 
bakers would welcome their advent into Belgium. They feel that 
the moisture worked into the home-milled flour, estimated by some 
as high as 10 per cent, through the wheat-washing process employed 
by the Belgian millers, is far from increasing the intrinsic value of 
the flour. If moisture is to be added the bakers prefer to make the 
addition themselves of such forms of moisture as will increase the 
volume and value of the output. When opportunity offers, as it may 
upon the presentation of a minimum or maximum option of tariff 
in America for Belgian industries, such facts will be made the most 
of by classes whose interests, like those of bakers, lie in the direction 
of free trade. 

DUTY ON FLOUR. 

It has been said in defense of the duty on flour of 2 francs per 100 
kilos that it was inaugurated at a time when French millers, under 
the then existing bounty system of payments on exported flour, 
threatened to overwhelm the Belginn milling industry. Since then 
and for a number of years no bounties have been of practicable appli- 
cation for mills of northern France, nor is there any likelihood of 
French flour making serious inroads in Belgium in the future. With 



BELGIUM. 93 

better access to imported wheat, the Belgian mills are now in stronger 
position than those of France. It has come about in recent years 
that the only flours capable of building up trade in northwestern 
Europe are those containing a large percentage of the harder varieties 
of wheat in their make-up. Such wheats are not produced in France. 
They must be imported. In respect to buying from the nations pro- 
ducing the cheapest surplus of hard wheats, the location of Belgian 
mills is superior to those of France, and they are not handicapped 
by a duty on wheat as are the mills of the latter country. French 
administration of the bounty law, and the changed tastes of the 
people, have thus worked together to remov^e tlie conditions that 
inspired the Belgian duty. Its necessity no longer exists. 



DENMARK. 

AN OPENING FOR MORE AMERICAN FLOUR. 

More trade is possible for American flour mills in Denmark. The 
opening exists for both flour and mill offals. The importations of 
flour have increased materially the past four years, and more than 
half the importations go into home consumption, which for the past 
two years also shows a healthy increase. It is true that with only 
2,598,000 population Denmark can never be a large customer for 
American foodstuffs, yet it is also true that sentiment and conditions 
are favorable to some extension of trade. A good start has already 
been made, and the market should be developed with increased energy. 
The imports of Ajnerican flour have come from a few mills. Hard- 
wheat flour is most largely imported. Much soft-wheat flour is used, 
this being almost wholly of home production. Low grades suitable 
for mixing with rye flour are generally in demand. While our flour 
trade with other countries has fallen off in recent years the reverse 
is the case in Denmark, which took in 1907 far more flour from Amer- 
ica than from any other country, and bought more in 1907 than in 
1906, the quantity being more than twice that purchased from us in 
1903, 1904, or 1905, the amount for 1907 equaling about 500,000 
barrels. 

Copenhagen's free harbor. 

Copenhagen, the capital, largest city, and most important port, 
according to the census of July, 1907, has 439,000 population in the 
city proper, with suburbs that swell the total to 500,000 people. Con- 
sidering the volume of business possible, few cities can claim the equal 
of Copenhagen's harbor and dock facilities. The free harbor, so 
called, where all imported commodities may be landed, stored, and 
handled without duty, until or unless sent into the city or interior, is 
equipped with modern appliances, elevators, quay buildings, electric 
cranes, railway connections, and extensive inclosed transit sheds, which 
up-to-date methods require. All these, installed in great part at pub- 
lic expense, are leased to a corporation which sees great possibilities 
in the future for Copenhagen's trade influence, and is as anxious to 
encourage American enterprise by way of this port as our exporters 
of manufactured products might reasonably desire. I am quite con- 
vinced that storage facilities, or the use of ground or buildings for 
the completion or assemblage of machinery, would be made available 
at favorable rates for any American exporter who would approach 
the managing company in the proper way. The 30 feet of water 
throughout the channels of the free harbor provides for steamships 
of large dimensions. The United Steamship Company, which in- 
cludes the Scandinavia-America Line with sailings from the more 
important American Atlantic ports, has in service, all told, some 115 
steamships. These, with barges and small craft, cover the service of 

94 



DENMARK. 95 

distribution from Copenhagen to all ports, however small, in the 
Baltic and North Sea trade. There are sailings to nearly all these 
ports twice weekly, and to some of importance triweekly or daily 
service is maintained for both freight and passengers. 

Copenhagen is on the east shore of Seeland, one of the several 
large islands included in the Kingdom, lying to the east of the north- 
ern peninsula of the mainland, called Jutland. These islands and 
the peninsula are for the most part well cultivated and rich in the 
production of agricultural products, especially those of the dairy. 
Aarhus, a city of 60,000 inhabitants on the east coast of Jutland, is 
a considerable distributing point for the smaller ports and inland 
towns, and to Copenhagen it has daily steamship service. 

LOW RAILROAD RATES FLOUR MILLS. 

The mainland part of Denmark and some of the larger islands 
are well supplied with railroads, most of which are under govern- 
ment control, but there are also railroads under private corporate 
management. Kates by rail on full carload lots of 10 tons are prac- 
tically as low as rates by steamship and barges. The entire western 
coast of Denmark has to be supplied by rail, since the nature of the 
coast on the west does not afford refuge or harbor facilities for any- 
thing but small fishing or light craft. Esbjerg, at the extreme south 
of Denmark's west coast, is the only harbor or port on that side. It 
is from here that much of Denmark's farm and dairy products go to 
England by way of the steamship lines direct to that country. There 
are no canals of importance in any part of the Kingdom. 

The wheat and the rye crops of the country are worthy of men- 
tion, that of wheat averaging about 4,000,000 bushels. Some 2,000 
American harvesting machines were sold in Denmark the past year. 

The milling interest is represented by about 30 flour mills rang- 
ing from 300 to 1,000 barrels daily capacity, besides some 3,000 small 
mills, the majority of which are driven by wind or water and are not 
making much flour, being mostly used for crushing grains for feed- 
ing purposes. Of the merchant mills there are 2 of 800 to 1,000 
barrels capacity, some 18 of 500 or 600 barrels, and 10 making about 
300 barrels per day. The largest mill is at Copenhagen and there are 
4 other merchant mills in that city of 300 to 600 barrels daily 
output. Nearly if not all of these mills grind rye as well as wheat. 
They are generally modern in build and equipment, steam power 
being used in the case of the larger merchant mills. Formerly they 
enjoyed considerable export trade, but for the past two years their 
business has fallen off in this respect, owing to American, English, 
and principally German competition. The contest for home trade 
is strong between the city and provincial mills, to the point of leav- 
ing little profit to the millers since the decline in the export business. 

CLASSES OF FLOUR MADE. 

Two classes of flour seem to be the rule in Denmark's flour produc- 
tion, designated as " bakers' " and " household." The " bakers' " as 
ordinarily made is a classification of the various grades made from a 
blend of about TO per cent of hard foreign wheat with 30 per cent 
of the soft Danish wheat. When making " bakers' " the first patent 
is in reality nearly 90 per cent of the flour then made, the other 10 
per cent going to low grade. A second patent of 95 to 97 per cent is 



96 FLOUR AND WHEAT TEADE. 

also made, when the low grade then remaining may be set off for 
blending with rye flour or it may be allowed to go into offals. The 
" household " flour is made of a blend, say, of 10 per cent hard wheat 
with 90 per cent of home-grown or German or other soft wheat, and 
the flour is practically a straight run, not more than 3 to 5 per cent 
of low grade being taken out. The production of rye flour and the 
mills' facilities for blending their low grades of wheat flour with 
the rye product, against which there is no restriction, give them some 
advantage and enable them to " finish up " closely, since even the 
" red dog " can be disposed of in the rye goods. In Denmark, as in 
Germany, the figures used by the millers themselves in designating 
grade percentages are based on the flour extraction of 75 per cent of 
the weight of the wheat. Thus a patent termed 60 per cent here is 
virtually what would be known as a 90 per cent in the United States, 
since the millers in America generally base upon 100 per cent as 
representing the entire extraction of flour from the wheat, which 
there, as in Europe, is in practice around 72 to 75 per cent. 

A considerable trade exists for hard-wheat flour with the Danish 
merchant mills. Some blend it with the home product in the process 
of milling, while others buy it for distribution to their trade. The 
bakers producing the highest class of goods must have American 
flour to give them the peculiar combination of strength and color not 
possessed by the home mills, although the latter are making good 
goods of the blended kinds to which they are limited. Bleaching of 
flour is not done to any extent by mills of Denmark. 

I am of the opinion that in Denmark, as in certain sections of Great 
Britain, American blended flours might be marketed to a considerable 
extent as against the home milled flours of like description. The 
softer or " household " variety could be met in quality by our soft- 
wheat mills, and I think also in price as the season advances and 
home supplies in Denmark become relatively dearer. 

AVAGES AND STANDARD OF LIVING. 

The highest salary I can learn of being paid to head millers is 
$1,000 per year. Foremen get about $400 to $450 per year; skilled 
millers about $375 per year for day labor and $400 for night work. 
Packers, warehousemen, and ordinary laborers receive from $325 to 
$350 per year. Engine-room men are paid from $400 to $500 and 
stokers $300 to $350 per year. A mill of 500 barrels capacity would 
employ, exclusive of office help and teamsters, 21 to 27 men all told 
for day and night operation. 

Rents are relatively high and most laboring families are content 
with three or four rooms for cooking, living, and sleeping. Many 
laborers' houses have only three rooms. Rents are generally about 
$G.50 per month for three and four room apartments. 

The standard of living among flour-mill employees is better than 
that in some other industries, as the work is under cover and gen- 
erally regular. The breakfast at 5 a. m. is bread and coffee. A cold 
luncheon is often carried, which, with beer, is partaken of at 8 or 9 
o'clock and again at noon. A warm meal, if not available at noon, is 
taken in the evening after the twelve hours' w^ork is completed. 
One kind of meat, one or two kinds of vegetables, brown bread, 
cheese, and beer or coffee constitute the principal meal. Enforced 



DENMABK. 



97 



frugality naturally accompanies the low wage scale, though far less 
of abject poverty appears among the lower classes in Denmark and 
Germany than is apparent in Great Britain. The standard of living, 
as well as of wages, is much below that in the United States. 

THE IMPORTATION OF FLOUR FAULTY SEWING OF SACKS. 

The flour importing for Denmark and much for Sweden and Nor- 
way is done by a comparatively few concerns located at Hamburg and 
Copenhagen and who are quite well known to the exporting mills of 
America. They are open for additional connections, and the present 
would seem an opportune time for forming such arrangements for 
both flour and mill feeds. The demand for these commodities seems 
likely to be greater for the ensuing year than for that just passed. 
Mill brands should be adhered to and these should be judiciously ad- 
vertised. Both cotton 110-pound and 220-pound sacks and jute 220- 
pound sacks are in general use. 

I must also call attention to faulty sewing of sacks, quite notice- 
able in the flour from America now in store here. Millers generally 
must see to it that a reformation is worked in respect to sewing by the 
packers. The stitches are in many cases taken too far down in the 
material and, in handling, great gaps are torn, through which the 
flour sifts. The seam or roll at the top of the sack should be laid and 
sewn more closely and with more stitches, so that the strain will be 
less on each stitch. 

The consumption of flour in Denmark of the quantities imported 
into the country, in sacks of 220.47 pounds each, has been as follows : 
1901, 276,000 sacks; 1902, 303,500; 1903, 352,000; 1904, 298,500; 
1905,240,000; 1906,292,500; 1907,341,500. 

The imports total much more than the quantity consumed, because 
they include not only what was consumed in Denmark, but that 
which was transshipped to other countries. The table of totals of 
wheat-flour imports from all countries, with the amounts in the 
respective years from the United States, is as follows, in Danish 
pounds, which exceed American pounds by one-tenth : 



Year. 


Total 
imports. 


From the 
United States. 


Year. 


Total 
imports. 


From the 
United States. 


1903. 


83, 174, 000 
74,050,000 
76,070,000 


38, 822, 000 
28,044,000 
34,710,000 


1906 


115,419 000 1 78 097.000 


1904 


1907 


129,121.700 


87,667,000 


1905 









Wheat importations in 1907, as compared with 1906 and back to 
1902, are about 70,000,000 pounds less. Rye flour shows a decline in 
1907 of about 40,000 sacks, as compared with any of the previous four 
years, when the average was 150,000 sacks of 220 pounds each. No 
rye flour was received from the United States in the past four years, 
according to the published statistics. This flour comes mostly from 
Germany. 

AMERICAN FLOUR IMPORTED FROM GERMANY. 

While the figures show that of Denmark's total imports in 1907 
Germany sent 38,452,800 pounds, it should be remembered that a 
large part of this quantity came originally from American ports 
direct to Hamburg, whence it was sent into Denmark. Great Britain 

2304—09 7 



98 FLOUR AND WHEAT TEADB. 

contributed only 1,132,300 pounds of wheat flour to Denmark's im- 
ports in 1907, as against 3,374,300 pounds in 1906. France shipped 
in about the same quantity as Great Britain. 

The exports of flour from Denmark are made up mostly of flour 
that has been imported. They have increased from 14,500,000 in 
1903 to 55,500,000 pounds in 1906 and 66,668,000 in 1907. 

Denmark imposes no duty on flour nor on grains or feeding stuffs. 
Upon rice there is at present a duty of $2.24 per 220 pounds, but after 
January 1 next this will be reduced to about 53 cents per 220 pounds. 
The importation of wheat bran (but little of which comes from 
America) in 1907 was 141,000,000 pounds, of which 128,000,000 was 
consumed in Denmark. The amount was 10,000,000 under the con- 
sumption of 1906. Of oil cake and cotton-seed cake and meal the 
importation in 1907, at 931,000,000 pounds (Danish), was nearly 
100,000,000 pounds over 1906, and almost nine-tenths of the imports 
were consumed in Denmark. 



FINLAND. 

USE OF WHEAT INCREASING EXTENT OF FOREIGN TRADE. 

The extreme northern and eastern boundary line of American flour 
exports to northern Europe is marked by Finland. With this coun- 
try in recent years the mills of the United States have done a very 
respectable amount of business, and a reasonable increase may be 
looked forward to as possible and probable. American-made flour 
and American business methods are in favor in Finland. To be in 
favor means a preference which, under the peculiar racial divisions 
present in this as in other Baltic countries, is an advantage worth 
cultivating. American products are not subject to the prejudices in 
trade that embarrass the sale of goods of several nationalities that 
are enterprising competitors. 

The population of Finland is around 2,500,000. The people for the 
most part are rural rather than urban, being devoted largely to pur- 
suits of the soil and of the forest or engaged in seafaring or fish- 
eries. The cities, all lying along the seacoast on the west and south, 
are enterprising and important factors in the vast interchange of 
commerce carried on by the means of the many coastwise steamers 
and sailing craft between the ports of the Baltic and adjoining seas 
touching Russia, Germany, Sweden, and Denmark. 

Helsingfors, the capital or seat of provincial government, is on the 
south coast and has 125,000 population. Wiborg, at the extreme east 
of the southern coast, has 45,000 to 50,000 people. Abo, on the west 
coast, the terminus of an important east and west railroad and now 
claiming 45,000 population, is favored by open navigation the year 
round. Nikolaistad, or Wasa as the port is called, also on the west 
coast, is north of Abo and has about 20,000 population. Uleaborg, 
the only port of note at the northern end of the Gulf of Bothnia, is 
sometimes closed to navigation the last of September. Mantyluoto, 
a small place, is the port for Bjorneborg, a town of 16,000 people, 
and the distributing and buying center for a large interior popu- 
lation. All these cities and the smaller port towns as well, except 
Abo and Hango, are nominally closed to navigation by ice from the 
15th of October to the first or middle of April. 

The steamship regulation as to rates places the summer limit on 
Helsingfors at October 15 ; Wasa, October 10 ; Uleaborg, September 
30; Wiborg, October 15. Later shipments may be taken, but at an 
advance of 50 per cent in rates and subject to the " ice clause " in the 
bill of lading placing the liability on the owner of the merchandise 
for expenses incidental to the greater risk of navigation, and giving 
the ship's master option of delivery to such port as may be open. 
As a matter of fact, Hango, a small southern port, is usually open 
all winter, and general stores have been established there by mer- 
chants of Helsingfors, Wiborg, and other cities in the south portion 
so that their trade may be kept going to some extent during the win- 
ter through the medium of rail distribution, Hango having good rail 

99 



100 PLOIJE AND WHEAT TRADE. 

facilities. Thus, late shipments may be handled for buyers' account 
at Hango, though otherwise originally designed. The importance 
of shipments coming from the United States designed for Finland 
being shipped on time as ordered, and pushed through to destination 
with no unnecessary delays at the Atlantic seaboard, is therefore 
brought to the attention of all interested. The Baltic share of the 
rate may arbitrarily be made one-half greater almost any day after 
the 15th of October, and to some ports as early as September 30. It 
is almost needless to say that this advance must be avoided when 
possible. 

European competition in flour is making more headway at Abo, 
perhaps, than at any of the other ports, since it is open the year 
round. It would seem that Abo offers opportunity for future effort as 
a point of regular distribution for shipments of flour and many other 
American products. The growing importance of Helsingfors and 
Wiborg may well be carefully studied, for by way of Hango and Abo, 
with which they are connected by rail, will in time develop a large 
international year-round trade with St. Petersburg and interior north 
Russian cities. 

USE OF WHEAT INCREASING. 

Finland has no wheat-flour mills of importance, and relatively 
speaking not many rye mills. The largest of the mills grinding rye 
are at Wasa and Kuopia. One mill at Wasa and another at Wiborg 
produce rice products, and there are a few small oatmeal mills at 
various points. The major part of the rye flour, which forms the 
greater part of the cereal products consumed, comes from Russian 
mills, as do most of the supplies of mill feed. 

The increased use of wheat flour is making sure if somewhat slow 
progress in Finland. The available statistics as to the imports of 
wheat flour are offered in proof of this statement, as given below, 
and they also show that foreign-ground wheat flour, as distinguished 
from Russian made, is making the greater gain. The figures show 
imports of wheat flour, in 100 kilos (220 pounds) : 



Year. 


From Russia. 


From other 
countries. 


1903 


238, 670 
337, 320 
338, 600 
227, 000 


420, 930 


1904 


335, 760 


1905 


367, 960 


1906 - 


555, 20C 







Of the wheat flour imported, I think it is safe to assume that nearly 
or quite half in 1906 came from the United States, and that in 1907 
(no Finnish statistics being as yet published for that year) there was 
a decided increase in our flour exports to Finland. American flour 
finds its way there not only by direct transactions, which for 1906 
were 172,492 barrels (if exports to Russia as given in the United 
States statistical publications mean those to Finland alone, which is 
probably the case) , but the importing houses of Germany, Denmark, 
Norway, and Sweden are many of them directly represented in 
Finland and transship large quantities of American flour to that 
country. One representative of an American mill in Helsingfors 
claims to have alone imported over 182,000 sacks from the United 
States the past season. 



FINLAND. ' 101 

CONSUJMPTION AND QUALITY PREFERRED. 

The consumption of flour per capita is rather accurately arrived at 
by the records of imports, since there is no home production, and 
shows a gain of 20 per cent in 1906 as compared with 1903. Still the 
amount, standing in 1906 at 69 pounds per capita, is small. Fully 
half of the wheat-flour imports were of the coarse granular or 
semolina varieties made from hard wheats. These seem to be in most 
demand, being available for a greater variety of uses than closely 
ground flours, in the opinion of the users, who have been accustomed to 
flours of this character, such being the distinctive features of the Kus- 
sian " Kruptchatka," with which so-called high-class flours have to 
compete, and which has had the call with buyers in years gone by. The 
forms of bread peculiar to the Finnish taste and the use of hastily 
prepared puddings and porridges may account for this demand for 
granular wheat products instead of the softer and finer milled flours. 
While possibly 50 per cent of the flour requirements may be for the 
softer sorts, those in use are not largely of the " patent " kind, but 
are mostly " straights " and " clears." However, some decided in- 
crease in sales must be noted on the part of some American hard- 
wheat mills, the past year particularly on their standard patent grades. 
The demand is not likely to be wholly confined to semolina or granular 
patents, though these form the basis of the sharpest competition, 
which of late has reached a somewhat acute phase. 

While wheat flour in point of consumption is gaining in use, as 
shown by the imports, the use of rye flour, if gauged by the same 
standard, would show a marked falling off, but it is probable that in 
addition to the imports of rye flour the home mills have increased 
their output of the rye product to some extent. Following are the 
statistics of imports of rye flour, and it is interesting to note that 
those from Eussia show a decline. The quantities are in 100 kilos 
(220 pounds). 



Year. 


From 
Russia. 


other 
countries. 


1903 


Kilos. 
1, 656, 690 
1,811,930 
1,192,850 
1,034,800 


Kilos. 
415,630 
355, 554 


1904 


1905 


286,360 
522, 840 


1906 





The rye-flour imports show 137 pounds per capita in 1906 as 
against 182 pounds in 1903. 

The policy of Kussian mills and merchants in other lines to deal 
directly with the small buyer and thus avoid the Finnish importing 
houses may in part account for the decline in importations from 
Russia. That the preference appears to be favoring foreign rather 
than Russian trade connections seems to be borne out by the figures 
showing imports and exports in recent years, and in view of this, and 
the fact that Finland levies no duty upon wheat or rye flour nor on 
feeding stuffs, American millers and shippers of these commodities 
may feel that they have a fair field for whatever expansion in trade 
the needs of Finland may justify. Some material advantage doubt- 
less exists for the present crop season in view of the unusually short 
crops of grain in Russia the current year. 



102 



FLOUR AND WHEAT TEADE. 



CHARACTER AND EXTENT OF FOREIGN TRADE. 

The aggregate of Finland's business with the outside world assumes 
remarkable dimensions when compared with other European countries, 
population considered, or in comparison with the per capita volume 
in the United States. The latter on the basis of 80,000,000 popula- 
tion was, per capita, around $40. Finland's total for 1906 was 
$114,350,000, or $45.70 per capita for her 2,500,000 people. The offi- 
cial figures show, in Finnish marks of 19.25 cents each, the money 
value of all imports and exports, as follows : 





Imports. 


^ Exports. 


Year. 


From 

Russia. 


Other 
countries. 


From 
Russia. 


other 
countries. 


1896 


3farks. 
54, 800, 000 
86, 700, 000 
94,500,000 
95,500,000 


Marks. 
117,800,000 
128, 000, 000 
173, 000, 000 
218,400,000 


Marks. 
47,900,000 
55,000,000 
67,000,000 
82,000,000 


Marks. 
111,000,000 


1901 


131, 000, 000 


1905 


179, 000, 000 


1906 


197,000,000 







Thus the total of trade, which amounted roundly to 400,700,000 
Finnish marks, or $77,000,000 in 1901, jumped to 516,000,000 marks, 
or $99,300,000 in 1905, and further increased to 594,000,000 marks in 
1906, or $114,350,000. 

The imports consist mostly of breadstuffs, fertilizers, machinery, 
and wearing apparel. The exports are mainly wood in various forms 
of lumber, farm products, and wood pulp and paper. 

The principal exports for the years 1905 and 1906 appear as fol- 
lows, in Finnish marks: 



Products. 


1905. 


1906. 


Wood and lumber . . 


124,318,000 
41,475,000 
34,294,000 


143, 758, 000 


Farm products 


41,797,000 


Wood pulp, paper, etc 


38, 490, 000 







THE DAIRY INTERESTS. 

Of the farm products exported in 1906 by far the greater part con- 
sisted of butter and dairy products, the official figures for these being 
37,485,000 marks, of which England bought the greater portion. 

It may be of interest to note that Finland prohibits the manufac- 
ture of oleomargarine or imitations of butter, with the result that 
while its dairy interests have prospered and built up a large and 
valuable foreign trade, the price of butter at home is so high as to 
place it quite beyond the reach of many people, and there is conse- 
quently considerable agitation for relief in this respect. Should the 
movement succeed in causing the legislative body to remove the pro- 
hibition against the manufactured substitute for butter, large impor- 
tations of American oleo oil and other ingredients of butterine would 
be probable, as factories for their use would quickly get into operation, 

FORM or AND COVERING FOR PACKAGES. 

The packages preferred for semolina and granular flour are of 
heavy cotton drills or " Osnaburg," and necessarily so because of the 
loss by leakage that would follow a slight tear. Such packages 



FINLAND. 103 

should contain 80 kilos, or 176 pounds. This size is the established 
Russian package for flour and is wanted in preference to any other. 
The softer or ordinary forms of flour are taken in the standard cotton 
sacks in sizes of 50 and 100 kilos (110 and 220 pounds). 

As suggested in a previous report, I would recommend that all 
flour for this and other Baltic trade be shipped in bags of stronger 
and more serviceable material than the standard sheeting because of 
the domestic uses to which the sacks may be afterwards put, which 
in time will aid materially in giving the preference to the mill using 
such packages. The frequent handling of flour for most of the Baltic 
ports calls for greater durability of packages aside from the feature 
of their after use. Whatever other printed matter may appear upon 
the sacks, I am convinced it is to the interest of all concerned that the 
words " Made in America " should be prominent. 

The flours of Argentine mills are making some progress in the 
Baltic trade because of their granular character, but their packages 
are not so satisfactory as those from the United States. In this 
respect the American mills, with their lower cost cotton goods, need 
not greatly fear any competition. Argentine flour is not in great 
favor at any port, and less so since the adoption in that country of 
the 50 kilos (110 pounds) package, brought about by the demand of 
laborers who have decided through their organizations to no longer 
carry the 100-kilo package. 



FRANCE. 
FOREIGN FLOUR EXCLUDED. 

EFFECTIVE REBATE SYSTEM OPPORTUNITY FOR MEDITERRANEAN TRADE. 

Flour making in France is the most important industr}^ in the 
country in amount of capital invested and value of annual output. 
The political influence of the industry is not only powerful, but it is 
sufficiently concentrated by effective organization to be watchful of 
whatever pertains to flour milling and the making of such laws as 
will support and encourage it. The chief product of the soil is 
wheat. The chief food of the people is bread. To meet their 
requirement in this respect more wheat is needed per capita than in 
any other European country, save Belgium. Ordinarily, France 
produces wheat enough to feed her people and to enter into the 
export flour trade as well. The annual per capita food consumption 
figures slightly less than 7^ bushels of wheat. 

Under existing laws there is no possibility of flour from the 
United States or from any other country entering France for con- 
sumption in the country, except in event of a serious crop shortage. 
Only two years of insufficient home supplies have occurred in the 
last twenty years, once in 1891 and again in 1898. Then the condi- 
tions were met, as they would be again under like circumstances, by 
relaxing the protective laws sufficiently to meet the need for the 
importation of foreign wheat. The millers of France, not those of 
any other country, would then profit by such relaxation, for it is not 
at all likely that flour would be granted any concession from the 
prohibitive tariff now in force. 

RESTRICTIVE LEGISLATION. 

Since the serious shortage of 1891, when millers of the United 
States did supply a fair proportion of the need for flour, the laws 
relating to milling and the import and export of wheat and flour 
have undergone such alteration as will provide against the con- 
tingency as it appeared in 1891 and 1892, that then favored Ameri- 
can mills for a brief period. The lines have been drawn more closely 
to protect the home mills. If additional breadstuffs are needed they 
will come in as raw material in the shape of wheat. When the 
need arises, as of course it may happen any year, American wheat 
will be drawn upon as heretofore, perhaps to the extent of many 
millions of bushels, and the American grain merchants will in large 
joart supply the demand. This will come about because the French 
duty on flour, pound for pound, is more than twice that on wheat. 

EFFECT OF THE DUTY ON WHEAT. 

The French duty on wheat is 7 francs per 100 kilos, equal to 61.4 
cents per 100 pounds. On flour of ordinary use (60 per cent ex- 
traction, the limit of extraction being about 70 per cent) the duty 

104 



FRANCE. 



105 



is 16 francs per 100 kilos, equal to $1.40 per 100 pounds. Thus the 
duty is not quite 37 cents per bushel of wheat, but is about $2.75 per 
barrel of flour. Figuring 4^ bushels of wheat required to make a 
barrel of flour, the differential is $1.09 per barrel against flour, 
or 12 to 15 times an ordinary milling profit. In detail the duty 
provisions of the French law respecting foreign wheat and wheat 
products are as follows, the rates stated being francs per 100 kilos 
(1 franc=19.3 cents; 100 kilos==220 pounds) : 



Article. 




Dollars. 



Wheat 

WJieat partly ground containing more than 10 per cent flour 

Wheat flour: 

Extraction at 70 per cent and under (offal at 30 per cent and under) ..... 

Extraction at 70 per cent to 60 per cent (offal at 30 per cent to 40 per cent 
exclusively) 

Extraction at 60 per cent and under (offal at 40 per cent and more) . 

Bran , 



1.35 
2.12 

2.12 

2.61 

3.09 

.12 



A surtax of 3.6 francs per 100 kilos is imposed if the wheat or 
flour is produced in other than European countries and imported 
into France by way of the ports of other countries, but the products 
of non-European countries do not have to pay this surtax if the 
importations are made direct through French ports. The surtax 
would apply if, for instance, American wheat or flour designed for 
France were first entered at Antwerp or Rotterdam. 

The effect of the duty is not to raise the price of wheat above other 
markets — Liverpool, for instance — to the full extent of the 37 cents 
per bushel duty, but it does make wheat in France bring under ordi- 
nary conditions from 10 to 20 cents per bushel more than it is wortii 
in England. The grain producers profit by about half the amount 
of duty. The higher rate of duty on flour, however, is prohibitive of 
any business worth seeking, and as French wheat at the best is not of 
the best flour-making character, the bread, as a rule, is not high class 
in quality. The development of the bread-making art is no doubt 
stunted by the lack of various kinds of flour needed to produce results 
attained by bakers in other countries where high-class flours in point 
of color and strength, as those of the United States and Hungary, are 
available. 

EXPORT or FLOUR CURTAILED. 

The customs laws as at present administered tend to curtail the 
exportation of flour, and to this extent are favorable to the foreign- 
trade extension of American millers. French milling interests have 
faced the problem for many years of how to keep out foreign flour 
and at the same time enable themselves to do a trade in foreign coun- 
tries. While they have succeeded in solving the first proposition, they 
have made but little progress with the second, and are finding only 
limited fields for foreign outlet, and that only, as a rule, for the lower 
grades. With them the case is complicated by natural crop condi- 
tions, which give millers of the center, north, and west of France, 
where the greater part of the crop is raised, a plentiful supply of 
wheat, while the large milling industry of the south, developed under 
special privileges offered in the past administration of the duty laws, 
has little domestic wheat to draw upon and must import the bulk of 
its requirements. 



106 FLOUR AND WHEAT TRADE. 

It has evidently taxed the ingenuity of lawmakers and officials to 
so regulate affairs that both these branches of the industry might 
prosper. The mills of the north desire to export flour, for they have 
plenty of wheat at hand and do not need to import except in event of 
a crop shortage. Those of the south are constant importers of wheat, 
because the high rates of freight from the north do not admit of 
wheat transport to the south. To adjust matters so the duty on wheat 
would not bear too heavily on the southern millers and also possibly 
aid those in more favored sections, a system of rebates of duty was 
devised by which exported flour would secure the repayment of wheat 
duties. As early as July 5, 1836, laws with this end in view were 
enacted. On January 11, 1892, a change was made that enlarged the 
scope of possibilities for export and developed a condition in the 
trade that, following the very short wheat crop of 1891, gave a great 
stimulus to flour milling in all sections. 

Under this law the duty of 7 francs per 100 kilos on wheat did not 
have to be paid until ninety days from date of entry. A miller or 
shipper of flour, upon the exportation of the same, received from the 
custom-house a certificate of export, or " acquit," which was receiv- 
able for duties coming due on imported wheat and was transferable 
without limit. These " acquits " immediately had a market value 
equal to and generally quite above the amount of duty they repre- 
sented. Under this system the northern mills could and did export 
flour freely, and the southern mills bought the " acquits " and ten- 
dered them in payment of duties on the wheat they were obliged to 
import. The tendency of this was to largely increase the importa- 
tions of wheat, though it also greatly stimulated the export of flour, 
mostly to the advantage of the mills in the north. The southern 
mills, already possessed of a large export trade in flour to Mediter- 
ranean ports, had to meet increased competition there. 

REBATE OF DUTY WHEN FLOUR IS EXPORTED. 

The agrarian element assumed that too much foreign wheat was 
possible of admission, and as the world's price of wheat had worked 
down to a low level the price to French farmers was relatively low. 
The system was blamed for the lower price of home wheat. A change 
was demanded by the farmers, and though opposed by some millers 
and the speculative element that had come to deal largely in the 
" acquits," the sentiment generally favored restrictive measures. 
Modifications in the administration were made in July, 1896, and 
again on August 9, 1897, but it was not until the passage of the pres- 
ent law, in effect on February 4, 1902, helped in its passage by the 
exceedingly low price of wheat the world over in 1900 and 1901, that 
really restrictive results were brought about. This measure provides 
that all wheat imported is liable to a duty of 7 francs per 100 kilos. 
Anyone may import wheat which, on its arrival, passes under the 
supervision of the customs authorities. It may be sent abroad upon 
the payment only of a slight registry fee, or it may be taken out of 
bond for conversion into flour. In the latter case the duty must be 
paid at once. It can be recovered only by a miller or milling concern 
actually engaged in making flour, and then only on evidence that 
flour has been exported in the proportion stipulated in the regulations. 
It is not, however, necessary that the identity of the wheat, as con- 
verted into flour, be preserved. Any flour may be exported that is of 



FRANCE. 107 

the stipulated grade and quantity provided by the reiridations. The 
export of flour must take place within sixty days of the date of the 
admission of the wheat to the mill. The miller, and none other, upon 
receiving the wheat from the authorities, declares it for " the benefit 
of temporary admission." Having paid the duty he receives a cer- 
tificate to that effect, which is termed an " acquit," and which carries 
with it the miller's engagement to export within sixty days the follow- 
ing extractions and quantities of mill product for every 100 kilos of 
wheat imported : 

50% type, whicli is 62^ kilos flour and 35^ kilos bran. 

60% " " " 67^ " " " 30J " 

70% " " " 70 " " " 28 

80% " " " 80 " " " 18 " " 

In all cases 2 per cent is allowed for shrinkage in milling. Sam- 
ples in sealed glasses are deposited for reference in all custom-houses. 
The exported flour must be pure wheat product and equal to the sealed 
types, or a heavy fine is imposed. Should the flour and bran not be 
exported within the sixty days no refund of duty is made. If the 
flour is exported and the bran remains in the country the duty is re- 
funded, less the rate of duty on the amount of bran not exported, 
which rate is 60 centimes per 100 kilos, or 5J cents per 100 pounds. 

LIBERALITY OF THE REBATE SYSTEM. 

There is nothing in the law preventing a miller having no export 
trade from selling flour to an exporting mill, and nothing to prevent 
a mill importing wheat from selling the same to another mill after 
the importing miller has declared his intention to export flour. He 
may export his own or another's product and receive the authorized 
rebate of duty. Thus there is still a legitimate business between mill- 
ers in the handling of duty certificates, or " acquits," and this has 
developed a considerable brokerage business to facilitate exchange. 
"Acquits " are worth, at the present time (February 19) in and about 
Marseille, 2.75 francs above the 7 francs face value, and this not- 
withstanding the Government is very slow in refunding the duty. A 
miller requiring heavy stocks of imported wheat may have a large 
sum of money tied up in " acquits " which he dare not sell because 
he must use them or others that he can buy when he comes to export 
his flour. Hence it is that many millers are forced to ask long credits, 
thirty to sixty days, on their purchases of wheat from importers, in- 
stead of paying cash for purchases as in the United States. 

The use of the " acquit " system is, of course, now mostly limited to 
southern France. Some wheat is imported at northern ports, but 
not to large extent, and at none of the ports can more flour be 
exported than offsets the import of wheat. The home price of the 
raw material is too high to make exporting profitable except as favor- 
ing conditions occasionally present themselves. 

OPPORTUNITIES FOR AMERICAN MILLERS. 

The possible opportunity for American millers is with such French 
grain-importing houses as have established a flour trade at Mediter- 
ranean ports other than French territory. Many of these grain con- 
cerns have large connections throughout the countries bordering on 
the Mediterranean Sea, where they have built up valuable flour trade. 
Naturally, the demand for " acquits " indicates the state of the 



108 FLOUR AND WHEAT TEADE. 

French export flour trade, and these grain merchants also handlmg 
floiM" are in position to know the true status of the trade at all times. 
They are thoroughly informed daily as to the state of the American 
-*nd other grain markets; but they are not, with a few exceptions, in 
%lose or frequent touch with American flour mills. There is groifcd 
^or saying that some new trade may be developed, if judiciously fol- 
-fewed up, through the medium of these buyers. 
^v A very reliable Paris flour buyer is of the opinion that more Amer- 
ican soft wheat, clears and straights, as well as the better qualities 
of soft wheat low grades, can be sold by his connections in the Medi- 
terranean trade. No business in American flour is possible in France, 
but the merchants of that country handling trade at Mediterranean 
ports are naturally inclined to extend their connections and will wel- 
come American accounts if prices are within a workable range. A 
good deal of English bran finds its way into France and is in good 
demand from about the first of the year to the end of March. Amer- 
ican bran would find equal favor. Fairly broad clean bran is the 
only kind that would be wanted. It must be well cleaned of flour. 
The duty of about $1.10 per short ton of 2,000 pounds is not prohibi- 
tive, as such feed is generally high priced relatively in France. 

LINES TO BE FOLLOWED. 

I am urged to say that in seeking to establish connections European 
millers should follow out a line of correspondence systematically. 
A few mail samples and an occasional letter asking for bids will not 
suffice. This does not establish trade, and yet from correspondence 
I have seen it is surprising how many millers think it does. Mail 
samples having been submitted and a code agreed upon, the miller 
must follow up the subject with large-sized express samples and 
frequent mail quotations. The samples are needed for distribution 
to possible buyers, not merely as types in the importer's office. Fort- 
nightly mail quotations should be kept before the importers. While 
transactions would be by cable, there may be intervals of weeks or 
even months when no business may be possible, but the importer feels 
the need of frequent advices of value, nevertheless. An opportunity 
for buying may present itself at times to European importers when, 
to one not familiar with foreign conditions, there might seem no 
prospect of business. The interest of an importer once obtained 
should be kept alive. Quotations and fresh samples are best for this 
purpose. 

Whatever trade may be possible with French importing houses will 
probably be done on the basis of c. i. f. London or c. i. f. Marseille. 
From the former destination distribution to Mediterranean ports 
can often be made advantageously. The rate to Marseille from the 
American seaboard is generally, though not always, figured at G 
pence (12 cents) per 220 pounds above London. The packages are 
ordinarily jute covered, and weigh 220 pounds each. The terms with 
Paris trade are draft at sixty days' sight, with documents as in the 
United Kingdom, but the ordinary terms with Marseille buyers are 
sight or three-day sight draft with the usual documents. 

EXPORTS OF FRENCH FLOUR. 

The table below of exports of French flour will give an idea of the 
location of buyers. The figures are for 1907, but the location and 



FKANCB. 



109 



volume of trade does not vary materially from year to year. The 
aggregate for 1908, all the details for which are not published as yet, 
exceeds 1907 by about 100,000 bags. Sales to Mediterranean pod:s 
increased over 300,000 bags, while those to Great Britain and Belgium 
declined to 171,273 and 123,592 bags, respectively. The table isdn 
bags of 220 pounds each and is as follows: 



Countries. 



Russia 

Norway 

Great Britai 
Germany .. 
Holland ... 

Belgium 

Switzerland 

Spain 

Turkey 

Egypt 



Bags. 



19, 066 

20, 448 
306, 991 

57, 974 
100, 151 
217, 679 
384,428 

47, 436 
404, 625 
848, 911 



Countries. 



Algeria 

Tunis 

Senegal 

Indo-Chiua 

Colonies 

Free zones 

Other countries 

Total 



Bags. 



60, 471 

142,386 

34,280 

41,378 

55, 221 

137, 223 

154, 687 



2,933,355 



DURUM FLOUR AND WHEAT. 

SOURCE OF SUPPLY ^AMERCAN VARIETY CONSIDERED INFERIOR. 

I have given much time to and made extended inquiries regarding 
the subject of durum wheat and the possibilities of increasing the 
trade in American durum and its products. It is in Mediterranean 
ports that this variety of wheat is in greatest favor, but at best the 
market is very limited. The rather large business done the last year 
must not be taken as a guide for the future by those interested in 
the growth or marketing of this wheat in the United States. Condi- 
tions have specially favored American transactions in the recent past 
which may not often be duplicated. The practical failure of this 
wheat in northern Africa and southern Italy in the year made un- 
usually large purchases from America necessary. African ports, 
generally heavy shippers, became active buyers. The Russian sup- 
ply was not large, and Italy competed to a much greater extent than 
is ordinarily the case with the buyers at Marseille for this class of 
wheat. Heavy speculative purchases by a large Marseille house early 
in the season added excitement to the demand naturally existing. 
The house thus involved is now in process of liquidation. 

Marseille and vicinity is the seat of the only extensive milling in- 
dustry in France engaged in grinding durum wheat. With a daily 
working capacity of about 70,000 bushels of wheat of all kinds, the 
Marseille mills can use about 20,000 bushels of durum daily. These 
are probably outside figures. There is, however, a milling capacity 
of about 5,000 bushels daily that operates intermittently, part of 
which is on durum wheat. Practically all these mills grind what 
Americans would call hard wheat, but in Marseille only durum wheat 
is classified as " hard." The wheats most largely used are similar to 
American hard winter and hard spring varieties, but are termed 
"bles tendre " or "soft wheats." Small quantities only of what in 
America would be termed " soft " wheat are ground in Marseille. 

MAIN SOURCES OF SUPPLY. 

Tunis and Algeria, in the north of Africa, and the many ports 
of the Black and Azof seas in Russia, in the main supply the French 
requirement for both the durum and other varieties. Durum, as 



110 FLOUE AND WHEAT TRADE. 

grown in the above countries, is almost altogether a fall-sown or 
" winter " wheat. Its production is by no means confined to semi- 
arid territory. The best varieties and the plumpest and hardest 
kinds come from fertile and well-watered sections. In point of 
quality, as desired by the Marseille semolina makers, the American 
durum is considered inferior, and in practice is not preferably milled 
to a greater extent than 25 to 50 per cent mixture with the more 
favored kinds. It has had to be used to a greater extent, however, 
the past year on account of the partial failure elsewhere. Much dis- 
satisfaction exists as to the American shipments of durum from Gulf 
ports, and of late purchasers have barred such wheat in their con- 
tracts. The last crop of American durum coming from Atlantic 
ports was in better favor than the preceding crop, but is not liked 
because of irregularity in grade and the presence in it of much white 
and soft wheats. Buyers are not used to over 2 per cent of foreign 
grain and seeds in durum, but American lots come in with 6 to 7 
per cent of oats and cockle in addition to softer wheat. To be in 
demand durum must not only be relatively clean, but it must all be 
hard, extremely hard, the harder the better. Many varieties of the 
Russian product have this characteristic of extreme hardness and 
maintain it year after year. 

DURUM SHOULD BE CAREFULLY PREPARED. 

To be a commercial success in the Mediterranean trade American 
durum wheat must be more carefully grown and more rigidly in- 
spected than any of the many samples of it to be found in Marseille. 
At present its price is quite too high to attract business. Its price 
status, as viewed from the European standpoint, in competition with 
superior wheats of the same variety, should be placed at full 20 cents 
per bushel below No. 1 Northern spring wheat, and on this basis only 
for strictly pure and reasonably well-cleaned wheat. Then, if of 
good quality, a continuous business might be established. Otherwise 
the trade for semolina purposes, as in the Mediterranean district, 
will be spasmodic and unsatisfactory, and liable to bring loss and dis- 
appointment to American shippers. 

In 1907 Marseille imported wheat of all kinds to the extent of 
28,700,000 bushels, of which 7,400,000 bushels were durum, and of 
this variety America furnished 2,935,000 bushels. In 1908 the total 
wheat imports were 20,870,000 bushels, durum being 5,700,000 
bushels, and 3,600,000 bushels of it coming from America. The 
average aggregate of annual wheat importations of Marseille since 
1900 has been 26,000,000 bushels, and the average requirement of 
durum will slightly exceed one-fourth the total. 

While Italy and other Mediterranean countries are users of con- 
siderable durum, it should be borne in mind that whenever possible 
the European supplies will be given preference over American, 
partly because of superior quality and partly because the consign- 
ments coming in smaller parcels are more easily handled, and are 
continuously coming into market when crops are fair. To increase 
the production of American durum beyond the ability of the Medi- 
terranean ports to absorb, and the limited requirement of American 
makers of macaroni, will react quite seriously to the loss of growers, 
besides putting upon the world's markets a quantity of low-priced 
wheat which mills competing with those in America for foreign flour 



PRANCE. Ill 

trade will avail themselves of in the production of their blended 
flours, thus disturbing values and affording to them lower cost and 
selling prices than American mills can meet. All this will in time 
react against the farm price of standard varieties of wheat in the 
United States. 

MANUrACTURE AND USE IN ITALY. 

As milled in France and Italy durum wheat is not converted into 
flour, as the term is understood in America. The milled product is 
coarse, sharp, and granular to the extent of 60 per cent of the weight 
of the wheat, with no fine or floury portions oi the berry. In fact, the 
nature of the durum, as described by the millers, is such that no fine 
flour of high grade can be economically made, or if made it could riot 
be sold at any profit. This granular product — " semolina," as it is 
termed — is used exclusively for the manufacture of macaroni and a 
great variety of paste goods similar in character. It is the hard, flint- 
like gluten content and the low percentage of starch that makes this 
wheat valuable. If mixed with soft wheat or if deteriorated by soil 
or climatic conditions that tend to soften the grain and increase the 
starch the value of the wheat for semolina purposes disappears. 
The paste made from semolina containing soft or starchy wheat is 
inferior and will not produce required results. Millers or dealers 
offering any semolina other than the coarse, hard product free of flour 
would find little or no trade. 

MANUFACTURE OF SEMOLINA. 

Great care and considerable scientific knowledge have to be given 
to the manufacture of semolina and also to the selection of the proper 
durum wheat. The milling of semolina is quite distinct from that 
of flour mulling, though in Italy, as in southern France, many mill- 
ing concerns produce both classes of goods. Durum is never used 
for making flour for bread purposes in the countries where it is under- 
stood and where the greatest market for it exists, which is in the 
Mediterranean region. In practice the ordinary milling results are 
60 per cent semolina and 14 per cent " farinetta," or low-grade farina- 
like flour, dark in color and containing what starch was in the wheat. 
These extractions are, of course, supplemented by the bran and feed 
offals of 26 per cent, less the waste in milling, ordinarily figured at 
2 per cent. 

The selection of the wheat is the prime requisite in the profitable 
making of semolina. The nature of this product is such that its de- 
fects can not be concealed. Sharp as coarse sand, it would not be 
semolina if in any other condition. The uniformity in granulation 
and freedom from flour are its characteristics. To obtain these fea- 
tures in the product only well-known wheats that have stood the tests 
for years are wanted. 

BEST REGION FOR CULTIVATION. 

It is a singular fact that of the European countries only a limited 
region tributary to the Azof Sea raises the best. This is known on 
the market as " Taganrog," since it comes from that port in Kussia. 
This wheat is dark in color, about the size of the American durum, 
and has a thin bran. It differs from the durum raised in the United 
States in being much darker in appearance and more uniform in 
color and hardness. The lighter color of American durum would 



112 FLOUR AND WHEAT TRADE. 

not be objectionable if it were more uniformly hard. The latter has 
been in large demand the past two years with Italian mills, but 
mainly because of the light crops in the Azof region. Some mills 
have been obliged to use as high as 75 per cent of American durum, 
and many of them 50 per cent the past two years. With full crops 
of the Russian grain these same mills will not be buyers of American 
durum except it can be obtained for less money than the Russian. 
At this writing (February, 1909) Taganrog is offered at 23 francs 
per 100 kilos c. i. f. Genoa, or $1.21 per bushel. Choice samples of 
American No. 1 durum would bring 22 francs, equal to $1.16 c. i. f . 
Genoa, but no more. The recognized difference in the Italian grain 
trade, as dictated by the mills, is equal to 5 to 7 cents per bushel less 
than Taganrog for American No. 1 durum, and a further discount of 
2 to 3 cents per bushel for No. 2. 

DURUM FROM ARGENTINA EXTENT OF IMPORTS. 

For the past two years the Argentine Republic has been shipping 
some durum wheat to Mediterranean ports, but the quality is in- 
ferior, and to-day it can not be sold at better than 10 cents per bushel 
under the Taganrog grade. Mills do not care to blend over 20 
per cent of La Plata durum with their Russian mixtures. At present 
the price of American durum is held by dealers in the United States 
at quite above the Taganrog price, and hence, as stated by im- 
porters, they are unable to effect sales of it. As soon as navigation 
IS more free from southern Russian ports the shipments of wheat 
from that country are expected to be quite liberal. 

The time of shipment required from Taganrog to Genoa is from 
ten to twelve days. The traffic is carried mostly in privately owned 
Greek steamers of from 3,000 to 4,000 tons capacity. The annual 
imports of durum for Italy average about 20,000,000 bushels, three- 
fourths or four-fifths of which come from Russia, except for the past 
year, when Russia supplied only about three-fifths. During 1908 
the importations of durum exceeded those of the softer or flour- 
making wheats, being nearly double in quantity, but in previous 
recent years the importations of durum and other varieties were 
about equal. The United States has furnished Italy about 5,600,000 
bushels durum both in 1907 and in 1908, as against only 1.000,000 
in 1906. 



ITALY. 

RATES OF DUTY AMERICAN DURUM CARELESS GRADING. 

The high rates of duty on certain products manufactured from 
cereals imported into Italy are somewhat discouraging to the hope 
of securing any consideraJjle sales of American wheat flour in that 
country. The rates of duty upon products of w^heat imported into 
Italy are as follows: 

Flour, 11.50 lire per 220 pounds, equaling $1.01 per 100. 
Semolina, 15.50 lire per 220 pounds, equaling $1.36 per 100. 
Wheaten paste, 16 lire per 220 pounds, equaling $1.40 per 100. 
Bran, 2 lire per 220 pounds, equaling $0.18 per 100. 

The duty on wdieat, the raw material, is but 66 cents per 100 pounds. 
Allowing 4^ bushels of wheat to make a barrel of flour, the differential 
in favor of flour is 19.7 cents per barrel. On semolina, the wheat 
product used largely in Italy for the manufacture of macaroni, the 
differential is equal to 86.5 cents per barrel of 196 pounds. While 
some American flour might be sold to Italian buyers at Genoa, Turin, 
and Milan, I very much doubt if any profitable trade can be built up 
in or about Naples and southern Italy. On semolina there is no pos- 
sibility of export to Italy while the customs laws remain as they now 
are. 

SALES OF AMERICAN DURUM WHEAT. 

The only farinaceous food commodity that Italy Avill take from us 
in large volume is the durum or macaroni wheat in its raw state, and 
she will not take this if the Russian Taganrog variety can be obtained 
in sufficient amount to meet the needs. The American durum does 
not possess the desired quality nor quantity of gluten as it has been 
coming to the mills, nor is it graded closely enough as to the amount of 
soft wheat and foreign seeds and grains it contains, as finally market- 
ed, to put it in favor. To make the American durum a desired prod- 
uct for Italian importers, exceeding care must be taken in the selec- 
tion of the seed with a view of sowing only the very hardest sorts. 
It is hardness for milling purposes, not hardiness as to growing quali- 
ties, that will maintain this wheat in the Mediterranean markets. It 
is of more importance to the American grower of durum that the 
quality of the grain itself be considered by the advocates of this wheat 
in the American NorthAvestern States, for on its quality depends its 
market. Purity as to hardness should be the first consideration. 
The flint-like characteristic of the gluten must be there or the miller 
will have no use for it in semolina making, providing he can get what 
he wants from Russia or North Africa, which he can generally do. 
When the wheat is offered for sale it should, in the interest of develop- 
ing the demand for it, be subject to much closer inspection and grading 
than ordinary or standard varieties of wheat. Being a special wheat 
for special purposes, it is highly important that its grading be such 

2304—09 8 113 



114 FLOUR AND WHEAT TRADE. 

as will insure buyers at home and abroad that they are getting exactly 
what they bargained for and that there will be no imposition. Then 
foreign millers of durum will give it due consideration. If even so 
small an amount of other wheat as 2 j)er cent is permitted to pass with 
durum, the grade is lowered to the point of undesirability and a much 
lower price will have to be accepted in settlement, with the attention 
of buyers more firmly fixed thereafter than before on the purer sorts 
that come from other countries. 

LAEGE PURCHASES OF DURUM. 

In 1908 the United States furnished Italy, according to Italian 
statistics, durum wheat to the amount of 5,420,000 bushels, and in 
1907 almost exactly the same amount. These were exceptional years 
of scarcity of this variety of wheat in Russia. North Africa, which 
generally has durum in sufficient quantity to supply considerable 
exports, was also short and became a buyer, thus reducing the 
quantity available for Italy from Russia. Notwithstanding all this, 
Russia shipped to Italy 12,000,000 bushels of durum in 1908 and a 
slightly larger quantity in 1907. In 1906 Italy imported over 
18,000,000 bushels of durum from Russia, as against 1,036,000 bushels 
from the United States. In 1906 Roumania exported over 4,500,000 
bushels of durum to Italy. If the producers and inspectors of durum 
and others interested in the handling of this grain in the United 
States could see the difference in the quality and cleanliness as 
between the Taganrog durum and the American grades of No. 1 and 
No. 2 durum, they would be convinced of the need of strict grading 
to place the American product on something like a parity. I have 
seen all varieties in the markets of France and Italy and in the mills, 
and I have no occasion to be proud of the American sorts. Seeing 
the need of more careful selection and stricter grading, I earnestly 
call attention to these features. 

HANDLING SEMOLINA AND MACARONI. 

The producer of semolina in America is not only barred out of 
Italy by the high tariff, but if this were not so he would have to be 
given the best possible service in the matter in time of shipment, 
otherwise he would have to overcome the existing prejudices among 
macaroni makers against semolina that is not fresh ground. Accord- 
ing to the notions of the trade, semolina deteriorates rapidly. The 
customary limit for safety in the warm months is eight weeks, and in 
the cool months twelve weeks. If the railroad and the steamship 
lines working with Mediterranean ports could make no quicker 
through time than to other European points the semolina would be 
valueless in many instances before delivery. As a matter of prac- 
tice in Italy, the semolina is converted into macaroni as promptly as 
possible. 

In the southern half of Italy (including Sicily) , where eight-tenths 
of the imported hard wheat is ground, very many of the large milling 
concerns are makers of macaroni. In fact, more than half the 
macaroni and similar paste products are probably made on the 
premises where the wheat is ground. This comes about from the 
fact that much of the durum wheat has to be imported and comes in 
under the law of " temporary admission." Upon its exportation as 
flour, semolina, or macaroni, and similar paste products, the duty 



ITALY. 



115 



is paid back. It simplifies matters where the importer and miller 
of the wheat is also the exporter of the macaroni. Thus it happens 
that while there are large manufacturers of macaroni who have no 
mills, the exporters of macaroni are largely millers as well as maca- 
roni makers. Some of the large mills I have visited in the vicinity 
of Xaples sell no semolina as a regular stated business, but require 
all they make for their own paste-goods plants. The varieties of 
macaroni are many, hundreds in fact. One mill visited has dies for 
over 100 forms. 

EXPORT PRODTJCTS OF ITALIAN MILLS. 

There being no present opportunity for American semolina makers 
in Italy, and likewise little for makers of the grades of flour usually 
shipped from the United States, it becomes of interest to know 
something of the disposition of the surplus product of Italian mills 
over home requirements, arising from the paternal system of bounties 
on exports. The following table from official sources gives the quan- 
tities in quintals of 220 pounds each for the last three years : 



Countries. 


1908. 


1907. 


1906. 


Countries. 


1908. 


1907. 


1906. 


Flour to— 
Austria-Hungary 


Quintals. 

13,299 

15,338 

107, 678 

150,296 
75, 397 
24, 665 
57, 189 


Quintals. 
9, 852 
95, 479 
84,153 

93, 993 

39, 031 

16,661 

114, 702 


Quintals. 
12,597 
44, 407 
54,381 

55, 323 
63, 693 

16, 884 
69, 155 


Semolina to— 
Tripoli . 


Quintals. 
17,701 


Quintals. 

14, 630 

1,085 

39, 171 


Quintals. 
13,926 
34 76'' 




Swit7prln nH 


Others 


6,374 


4 o->2 


Turkey in Eu- 
rope^. 


Total 




162.417 


158, 701 


111, 738 










fS^p^oii:::::;;:::: 


Macaroni, etc., to— 
Austria- Hungary 


6,788 
1,936 
2, 720 

28,053 
2,014 

14, 215 

385, 369 

2. 129 

46, 256 


5,841 
3,006 
5,850 

33, 573 
1,689 

16, .597 

448, 027 

1,934 

51,261 




others 


9,133 




3,786 
6,072 


Total 


443, 862 


453. 889 


316. 440 


Germany 

Great Britain 

Switzerland 

Egypt 






40, 247 

1,306 

28,833 

346, 396 


Semolina to— 
Austria-Hungary 


2, 850 
41,692 
1,121 
7,050 
71,836 
13, 793 


1,621 

18,874 

1,740 

9,870 

50,856 

20,850 


3,734 
12,127 

1,182 
19, 067 

6,612 
15,936 


United States 

Argentine 

Others 


Greece 


1,665 
56 854 




Total 




Egypt 


489, 480 


567,778 


494,292 







The 88,000,000 pounds of macaroni which the Italian statistics 
show to have been the average annual purchases of the United States 
from Italy for the three years past constituted about three-fourths 
of all the macaroni shipments Italy made. 

DRAW^BAOK OF DUTY. 

Unlike in the United States drawback of duty on exported flour is 
not paid in cash. The exporter of flour or macaroni is allowed to 
import a certain quantity of wheat free of duty in proportions set 
forth in the law governing what is called " temporary admission of 
wheat." 

The general terms of the law passed in 1890 and amended and in 
force August 8, 1895, now governing rebates of duties on farinaceous 
products, are as follows: 

Temporary importation covers wheat for flour making and durum 
wheat for semolina and paste products. At least 5 quintals must be 
declared, and the time for exportation is six months. The by-products 
that may remain in the country on which the duty rate must be paid 
are for soft wheat, 24 kilos of offals for every 100 kilos of wheat ; for 
durum wheat, 24 kilos offals, and 14 kilos of farinetta, or low-grade 



116 



FLOUR AND WHEAT TRADE. 



flour, for every 100 kilos of imported durum. The duty rate is 
2 lire (40 cents) per 100 kilos (220 pounds). The wheat duty must 
be paid upon issuance of the certificate of temporary importation. 
Importation or exportation may be effected at any custom-house. . 

A difference between soft and durum wheat products is made in 
that 65 kilos of flour and 9 kilos of low grade must be exported for 
every 100 kilos of soft wheat imported, while for every 100 kilos of 
durum imported but 60 kilos of semolina or the paste products of 
semolina need be exported to secure the duty paid on 100 kilos of 
wheat. Demand for the privilege of temporary admission must be 
made at the time of the importation of the grain. 

ITALIAN MILLS SAFEGUARDED. 

Regulations are provided governing the exportation of by-prod- 
ucts. No rebate of duty is allowed on them when exported unless 
the required amount of flour and paste products have also been ex- 
ported. Shipments, both imports and exports, are under customs 
regulation and supervision, and if the products do not comply in 
quality and quantity with the provisions of the regulations no repa^^- 
ment of duty is made. However, an allowance of 2 per cent is made 
for the shrinkage in process of milling. 

The wording of the law is peculiar, in that it provides for either 
importation or exportation of wheat and, as well, for both the ex- 
portation and importation of wheat products. This may be for the 
purpose of caring properly for the island provinces, or the intention 
may be to permit of exportation of product from home-grown grain 
before importation of foreign wheat. In any event, the working of 
the law is satisfactory to the millers and makers of macaroni for 
export. 

PER CAPITA CONSUMPTION WHEAT IMPORTS. 

The statistical division of the Italian Government places the an- 
nual consumption of wheat at the equal of not quite 5j% bushels per' 
capita. This, on the basis of 32,000,000 population, accounts for 
about 180,000,000 bushels annual requirement. The crop for the 
years 1901-1907 has averaged 167,000,000 bushels, with 17,000,000 re- 
quired each year for seed. 

The imports have been light for 1908 and 1907 as compared with 
1906, while the exports of flour, semolina, and macaroni are mate- 
rially greater for the last two vears than for 1906. The crop of 
wheat in Italy for 1908 is officially estimated at 135,000,000 bushels 
after allowing for seed. The official table gives the wheat imports 
in tons of 2,210 pounds as follows for the past three years: 



Countries. 


1908. 


1907. 


1906. 


Countries. 


1908. 


1907. 


1906. 


Durum wheat— 
Roumania 


Tons. 

15,105 

331, 016 

11, 662 

17, 228 

147,504 

25, 963 


Tons. 
24,827 
348, 290 
1,670 


Tons. 
126, 940 
501, 588 
2,679 


Soft wheat — 
Koumania 


Tons. 

48, 039 
61, 696 
81,505 
39, 183 
11, ,193 


Tons. 

119, 430 

248,592 

995 

24,414 

14, 509 


Tons. 

221,178 

439,516 

21,399 

25, 059 


Argentina 


Argentina 

United States 

Other 


United States 


147,555 
2,716 


28,249 
1,486 


572 


Other 


Total 






241,616 


407, 940 


712,724 


Total 


548,478 


525,058 


660, 942 







ITAI.Y. 117 

No figures seem to be available to indicate the relative amounts of 
hard and soft wheats produced in Italy, as the statistical division 
makes no distinction as to varieties. What hard or durum is pro- 
duced grows in the southern, half of the country and is fall sown. 
The northern half of Italy grows what are known as soft varieties, 
used for flour, and these are also sown in the fall. 

ITALIAN MILLS CAPACITY AND METHODS. 

There are about 1,200 flour mills in Italy commercially rated as of 
importance. There are many others of small capacity and doing 
onl}^ a minor local trade. There is no organization of millers as in 
France and Germany, but there are several groups of mills under 
one ownership or management that seem to have effectively worked 
out the problem of combination for the more economical production 
and marketing of products. At Genoa I visited one concern owning 
11 mills, 10 of which were in operation, grinding 55,000 bushels of 
wheat daily, nearly half of which was durum. In the Province of 
Kaples there are over 50 mills, but only 17 operating concerns. One 
large society with several mills grinds 11,000 bushels daily, one-half 
and over being durum. Other large concerns of approximately 
8,000 to 12,000 bushels daily grinding capacity are in Milan, Venice, 
Rome, and Palermo. Nearly all of these are the outgrowth of 
smaller concerns who have joined forces to more profitably control 
the trade naturally tributary to them. 

Trust methods, in so far as they control trade by avoiding un- 
profitable competition, do not seem to meet with disfavor in Italy 
as regards the milling business. Public sentiment seems to sanction 
such restraint of trade as will produce an adequate profit to a 
manufacturer even of foodstuffs. Likewise the purchase of sup- 
plies is controlled. What wheat is imported, varying from 30.000.000 
to 50,000,000 bushels annually, is largely supplied by one house, 
which more than any other one concern may be said to control the 
exports of wheat from Russia, with a similar dominating influence 
in Argentina. Millers do not have to pay for wheat on arrival or in 
advance, as in the United States, but are given what time and credit 
they require by the house supplying the imports. Competition in 
the purchase of imported wheat does not exist. It is profitably 
regulated. 



NETHERLANDS. 
GOOD MARKET FOR FLOUR. 

DEPENDENT ON FOREIGN PRODUCTS. 

The Netherlands is the second best European customer of the 
United States in flour. In copper it is apparently our best customer. 
This copper, however, is not used in this country, but is bought mostly 
by German merchants for German use. The copper is shipped 
direct to Rotterdam, the Netherlands getting credit for it in United 
States statistics of domestic exports. The Netherlands is a liberal 
buyer of our corn and wheat, taking in 1907 over $5,000,000 of each 
of those grains, in addition to about an equal volume in flour, the 
United States figures of flour values of exports to the Netherlands in 
1907 being $4,800,327, and in 1906, $5,176,350. The climate and nature 
of the soil are such that the Netherlands must always look to foreign 
sources of supply for breadstuffs. Wheat and rye are produced, but 
not in large volume. The statistical showing for 1907 of wheat 
production equals 5,329,150 bushels and of rye 14,494,600 bushels. 

TRADE or AMERICAN MILLS. 

American mills have enjoyed a comfortable trade with the Nether- 
lands for many years, the volume of which is next to that of Great 
Britain, our largest buyer of flour. Most of the business, probably 
80 per cent of it, is worked through importing houses in Amsterdam, 
some of whom have branch establishments at the nation's principal 
port, Rotterdam, through which the larger part of the country's 
foreign commerce passes. It is a rather remarkable fact that while 
85 per cent of the imports of American flour are through Rotterdam, 
fully 80 per cent of all is thought to be handled directly from 
Amsterdam, and a very large percentage is finally distributed from 
the latter city. While Rotterdam enjoys the greater distinction 
as a port of entry, Amsterdam is better located for distribution 
through the many canals that reach in all directions. Flour coming 
to Rotterdam is transshipped mostly in barges, but to some extent by 
rail, to Amsterdam, except such small amounts as may be primarily 
sold for local use or intended for trade in the southern part of the 
country. True, there are steamers sailing direct from the United 
States to Amsterdam, but these are not numerous as compared with 
the Rotterdam arrivals. The storage and forwarding facilities of 
both ports leave little to be desired, the Holland- America Line being 
especially well equipped with modern docks, sheds, covered barges, 
and other facilities for properly caring for flour. 

So well established had become the trade relations between Ameri- 
can flour millers and the importing houses of the Netherlands that 
the recent invasion of German flour into these markets must be looked 
upon as seriously threatening a very important branch of American 

118 



NETHERLANDS. 119 

industry. Not only is this so on account of the business thus lost 
to mills of the United States, but in the main on account of its 
possible effect on the policy of the Dutch Government respecting 
duties. 

SENTIMENT FAVOKABLE TO DUTY ON FLOUR. 

Heretofore there has been decided opposition to any change of the 
old-time custom of admitting free of duty foodstuffs for both human 
and animal consumption. While low rates of duties are levied on 
some manufactured articles flour comes in free. But there is a 
growing sentiment favoring a duty on flour, not as directed against 
the United States, but for protection of the Netherlands milling 
industry from the flour of German mills, now coming into the coun- 
try in increasing quantities, made possible by the bounty paid the 
mills of Germany on their exports. The great artery of German 
commerce, the Eiver Rhine, with its many navigable mouths and 
intersecting canals, finds its way to the sea through the Netherlands. 
Transportation rates over this river and the canals are so exceed- 
ingly low that nearly every point in the Netherlands can be reached 
at surprisingly low cost. Still, without the drawback of 36 cents per 
bushel German mills would get little trade in the Netherlands, as 
:9tronger and better flour is preferred by the bakers. But at the 
cheaj^er prices, made possible by the partial bounty contained in the 
drawback, the Netherlands mills and the mills of America have much 
to fear from the unfair competition. Thus, while American flour is 
wanted by the population, and is bought by many of the mills to be 
blended with or sold in connection with their own softer product, the 
possibility exists that for self-protection the mills may ask for flour 
duties. If any duty is imposed on American flour our trade in the 
Netherlands will be lost. 

There is no likelihood of any duty being placed on wheat, for 
the larger mills in the Netherlands run almost exclusively on foreign- 
grown grain. The home-grown crop is not used by them but goes 
almost altogether to the smaller mills, windmills and like minor 
affairs, where it is crushed but not bolted, the product being made 
into a coarse brown bread. The large mills are some 12 to 15 in 
number, varying from 250 barrels to 1,400 barrels daily capacity, the 
largest one being located at Amsterdam. The total output of the 
merchant mills is 70,000 to 75,000 barrels per week. The wheat 
ground by them comes from the United States, Russia, Roumania, 
Canada, Argentina, and minor surplus countries. 

COMPETITION OF GERMAN MILLS. 

To what extent the competition of Germany, fostered by the robate 
on flour, is affecting trade with the Netherlands may be seen in the 
official German statistics for the first ten months of 1908, which show 
shipments to the Netherlands of the equal of 239,017 barrels, while 
the same period of 1907 showed but 147,465 barrels. For the same 
periods the shipments from the United States are 144,236 sacks of 
110 pounds each less in 1908 than they were in 1907, and are 497,543 
sacks less than in the same ten months of 1906. In his report of 
August 7, 1908, Consul Henry H. Morgan, of Amsterdam, pointed 
out that the German gain in exports of flour to the Netherlands in 
the first six months of the year 1908 showed 48 per cent over the same 



120 FLOUR ANi) WHEAT TRABEi. 

period in 1907. The showing for the ten-months period ended Octo- 
ber 31, 1908, shows a German gain of 62 per cent, as compared with 
a year ago. 

VALUE OF AMERICAN FLOUR TRADE. 

The flour trade of the United States with the Netherlands, even at 
its present volume of 1,000,000 barrels per annum, is too valuable to 
lose. By such encouragement as herein proposed it may be restored 
to its former larger proportions. In the first three years of the 
present decade it averaged one-third greater than that for the past 
three years. The unnatural conditions that have brought about the 
decline that has been suffered can only be relieved by securing such 
favorable opportunities for the Dutch customer -as will establish a 
preference for the flour the United States has to sell. Any other 
course short of offering a bounty equal to and competitive with that 
which Germany pays on exported flour will cause the splendid trade 
we have with Holland to leave us. 

Amsterdam, the largest city in the Netherlands, besides its many 
canals and its rail facilities, has ample harbors and docks with a 
depth of water for the largest ships. The city lies aistant three hours' 
steaming from the sea, the connection being by means of a large 
canal, one of the deepest in Europe, with 40 feet of water. Deliveries 
of flour locally as well as to distant points are by canals, the banks 
of which are continuous " kades " or quays, abutting which are the 
residences, stores, and bakeries. But little flour is handled by wagons. 

PACKING AND GRADING. 

Since flour, like most other package freight, is carried from ship 
to warehouse, thence to barges, and then to the quays and into the 
stores or bake shops upon the heads of laborers, the regulation size 
of the package has come by custom to be a somewhat smaller one than 
prevails in countries where trucks and wagons are more generally in 
use. Fifty kilos, 110 pounds, is the size required here, and mills 
packing this size, net, in stronger sacks than are generally in use will 
secure a valuable preference. Jute is largely used, but a cotton pack- 
age of strong weave would have more value than the jute sacks after 
the flour has been removed, and this will give mills furnishing such 
packages a material preference with the final buyers. The ordinary 
standard sheeting is not heavy enough to withstand the frequent 
handling that follows the usual transshipment practice here without 
considerable loss. Some idea of the strain upon the package may be 
gained when it is known that the sack of flour carried on the laborer's 
heads is dropped directly to its resting place. This may be a ware- 
house floor, or the hold of a barge, or a brick-paved quay. It is often 
a sheer drop of 5 or 6 feet, repeated frequently before final destina- 
tion. The effect of such handling on a weak package certainly brings 
out the defects. The custom of handling is not likely to change. It 
would be wise to adapt the package to the custom. 

Higher grades of flour, especially of hard wheat, are gaining in 
favor and in volume of sales. Germany ships only patent grades. 
A large percentage of all the flour imports is of lower grades (clears 
and low grades), together with some soft winter wheat straight. 
Hard- wheat flours of all grades command the bulk of the trade. The 
percentages as to American imports are believed to run possibly 



HETHERLANDS. 121 

70 per cent Northwestern spring, 20 to 25 per cent hard winter, and 
5 to 10 per cent soft winter. Much the greater part of hard-winter 
flour from America are patents and straights. Of springs more is 
of the grade below patents. It is probable that of all varieties of 
American imports of flour 30 per cent is patent, the remaining 70 per 
cent being mostly clears with some straights. Low grades and " red 
dog " would be bought largely if American prices Avould admit, as 
they are used to a great extent, when obtainable, for cattle. 

The presence and use of rye bread and dark breads of mixtures of 
various kinds are much less noticeable than in Germany. In the 
cities, particularly, comparatively little of the brown stuff is used. 
It is to be had, of course, but the preference evidently runs to a 
higher quality more as it does in the United States. In the rural dis- 
tricts more rye and coarse breads are consumed, but still in less ratio 
than the white product of wheat. 

EFFECTIVE ORGANIZATION OF IMPORTERS AND MILLERS. 

The flour importers and mill agents of Amsterdam and Rotterdam, 
some twenty-five or more in number, are well organized, with officers 
and a board of directors to look after the general welfare of the mem- 
bers. They are men prominent in affairs and representative of the 
high commercial "standing that characterizes Dutch merchants gen- 
erally. Terms of purchase are in guilders (guilder=40.2 cents) 
per 100 kilos (220 pounds). As 100 kilos actually contain 220.46 
pounds, it is necessary that" the net basis weight of flour be not less 
than 220 pounds, though, as previously stated, the packages are 110 
pounds each. Payment terms on American purchases are ordinarily 
at three days' sight, subject to 1 per cent discount, with bill of lading 
and insurance certificate attached. All of the larger houses buy in 
this way. Some houses, however, buy on sixty-day terms. Importers 
purchasing on cash or three-day sight terms take up the documents 
when presented and due and turn them over to their buyers upon the 
latter's acceptance of three months' draft. This works smoothly Avhen 
the flour arrives on time, or within sixty days, but when, as often 
heretofore has been the case, the flour does not get in until three to 
four and even five months after shipment, there is disappointment 
and discouragement alike to importer and buyer that tends to turn 
trade away. Sales of German flour are made either through brokers 
working on small commission or direct by the mills to the smaller 
buyers, even down to 25 and 50 bag lots. Terms are cash with docu- 
ments less 1 per cent, or net sixty days. Just at present German pat- 
ents are quoted to the trade through iDrokers at 12.75 to 13.75 guilders 
c. i. f. (cost, insurance, and freight) as against American spring pat- 
ents at 15.75 and hard winter patents at 14.25 to 14.?5 guilders per 
220 pounds, c. 1. f. terms. 

FLUCTUATIONS IN PRICES. 

While German, Belgian, and home-milled flours are steady in price^ 
the offerings from America are changing from day to day according 
as the American wheat markets are varied by the shifting speculative 
conditions causing them to fluctuate far more violently than those of 
other countries. Such quick and unexpected alterations in price, 
forced upon American millers by the seemingly artificial and some- 
times wholly home-made excitement at speculative centers, tend 



122 FLOUR AND WHEAT TRADE. 

greatly to curtail the business in American flours that would naturally 
follow were the basis of price more steady and dependable. The 
advantage German mills have in their lower prices is made greater 
by such advances as American mills are sometimes obliged to make 
without a corresponding advance in European market centers. The 
orders go where the difference in price is great enough to offset the 
inferior quality, and when upon reaction to lower levels American 
prices are again within reach, the buyers have been supplied. 

The importers of the Netherlands are not speculatively inclined. 
They much prefer to buy in moderate quantities, and would welcome 
conditions that would facilitate more regular business, such as the 
markets of countries other than America admit of. Purchases 
ordinarily of 600 bags of 110 pounds each, or multiples thereof, may 
sometimes reach as high as 12,000 to 15,000 bags and upward, but a 
business in moderate quantities more frequently placed would result 
in a greater aggregate trade. Orders as they come to the importers 
are generally in lots of 300 or 400 sacks, 110 pounds, or less. Hence 
in their purchases the importers, while taking 600 or 800 bags, or 
multiples, may frequently desire separate documents on each 300 or 
400 sacks, requiring two bills of lading and attendant separate papers 
for each carload shipped. While 300 bags have for a long time been 
the customary lot for the importers to sell here, it is thought that the 
trade can in most cases be gotten to a 400-sack basis if the size of 
American cars necessitates such change. 

The latest statistics of population published this year give the total 
for the Netherlands at 5,680,000. The enumeration for the four 
largest cities is as follows : Amsterdam, 565,000 ; Rotterdam, 403,350 ; 
The Hague, 254,500; Utrecht, 114,800. 

Those in the best position to know consider the normal import of 
American flour to be slightly in excess of 2,200,000 bags, 110 pounds. 
They averaged this in 190*0, 1901, and 1902. In 1906 they were 
2,200,000 bags; in 1907 they were 1,594,076. In the ten months of 
1908 ended Avith October 31 they were 1,242,220 bags. In the same 
ten months of 1907 they were 1,386,421 bags, and in the similar period 
of 1906 they were 1,739,728 bags. 

TRADE AT ROTTERDAM. 

ONE OF GREATEST PORTS IN EUROPE. 

Rotterdam, second city in Holland in point of size, is one of the 
greatest, if not now the leader, of European continental ports. Possi- 
bly the tonnage of Plamburg or of Antwerp may exceed that of Rot- 
terdam. On this authorities differ. The official records would be 
needed to decide. In variety of imports and exports, and in number 
of craft engaged upon her waters, this city probably takes the lead. 
Much of the present volume of traffic has been the outgrowth of com- 
paratively recent years. While to the observer it would seem that 
the harbor's many channels, basins, and docks were ample, the spirit 
of progress is strongly in evidence in anticipation of future needs. 
Large as the harbor now is, work is in progress and well along toward 
completion for additional basins and anchorages between the city and 
the sea that will double the present facilities. How much enterprise 
has been called forth may be noted from the fact that all the vast 
basins now in use and the increased room at present being made 



itETHERLANDS. 123 

have been excavated from the land, many hundreds of acres in ex- 
tent, and to such depth as to accommodate the largest vessels afloat. 
In the north of the Netherlands millions, probably many hundreds 
of millions, have been spent to recover land from the sea and to pro- 
tect the low-lying land from overflowing by elaborate dikes and 
canals. In and about Kotterdam the process is being reversed, in 
turning into seaways and anchorages tracts of ground lying between 
10 and 20 feet above high water. It would be idle guesswork to 
mention the probable millions of money that have been put into this 
work and which are still in contemplation for completion of that 
now under way. 

All this great traffic, present and prospective, is not designed for 
the Netherlands. Her merchants and shipowners have indeed the 
handling of a large part of it. They expect to receive due benefit by 
the probable growth. It is to and from Germany that the Nether- 
lands must look for the destination and origin of this wonderful 
volume of commerce. The development of German rivers and canals 
is the ke}^ to Kotterdam's growth and prominence. The Khine and 
its network of canals and branches, covering nearly every part of 
Germany, bear away the commerce from every part of the world, 
finding entry at Rotterdam to the extent of possibly 85 per cent. 
The balance is used or consumed in the Netherlands and northern 
Belgium. The railroads play an unimportant part. If they were 
suddenly closed to traffic, the business at Rotterdam would go on 
undisturbed as to volume. 

The seagoing ships entering Rotterdam number hundreds weekly. 
Nearly 200 have arrived in one day in especially busy times. So 
much freight for distribution calls for thousands of smaller craft. 
These are barges or lighters of every description, from the 50 to 100 
ton boats, poled about by hand, to the long 1,800-ton steel-built light- 
ers owned by corporations and towed to destinations in twos and 
threes by powerful tugs. Much of the discharging to lighters is done 
directly over the ships' sides, and so is the loading of ships from 
smaller craft whe^iever possible. In wheat alone, the European im- 
ports of which through ports of the Netherlands average closely 
to 80,000,000 bushels annually, Rotterdam receives more than 60 per 
cent, while in rj^e, corn, barley, and oats the percentage through Rot- 
terdam amounts to 90 per cent. Germany is the final destination of 
more than 90 per cent of all grain receipts. Of the 85,000 tons 
of copper shipped to the Netherlands from various countries in 1907, 
Germany got 80 per cent. In iron, lumber, stone, and other raw 
materials, Germany's share of imports is from 80 to 95 per cent. 

FAVORABLE LOCAL. FREIGHT RATES. 

The low rates of freight by river and canal to and from Rotterdam 
are especially favorable. From 1 cent to 2 cents per 100 pounds can 
be made on wheat to Mannheim, depending on the season. The 
actual distance to be traveled is several hundred miles. The mills at 
Mannheim can and do get lower rates on wheat than are made to 
intermediate points of half the distance, because of the almost cer- 
tainty of loads back and the fact that at some points between Mann- 
heim and the seaports there is even a greater volume of freight west- 
bound for which higher rates are obtainable. From Mannheim to 



124 ■ FLOUR AND WHEAT TRADE. 

Amsterdam the freight by river and canal on flour, by yearly con- 
tract, is equal to 2 cents per 100 pounds. The distance is near 500 
miles as the river runs; it is 300 miles in a straight line. From 
Cologne to Amsterdam, midway between the latter city and Mann- 
heim, the flour rate is 2^ cents per 100 pounds. When the water 
reaches a certain low stage the rate advances slightly and goes higher 
as the stage of water lowers. In winter an arbitrary slight advance 
is also made. Occasionally Ehine navigation closes for a week or ten 
daySj but only in extreme cases of severe winter. 

FREIGHT RATES ON FOILEIGN WHEAT. 

The extremely low rates of freight on foreign wheat to interior 
German mills and the rates almost equally low on flour from them to 
all parts of the Netherlands make the growth of flour trade in the 
latter country comparatively easy for the mills of southern Germany. 
It is also easy for them to reach foreign ports by way of Eotterdam. 
Atlantic steamship lines desiring flour traffic for Europe from the 
United States should not lose sight of the exceeding ease as to rates 
by canal and coastwise barges and steamers possible to German and 
other continental mills, when contemplating either low rates on 
American wheat to Europe or higher rates on American flour. Either 
will prove a losing proposition to them and to American mills who 
will be cut out of so much trade as is thus made possible to German 
mills. It would seem that rates on wheat from America should be 
made on the basis of " all the traffic will bear," rather than that flour 
should be on this basis, since European and British mills must posi- 
tively have American and Canadian hard wheats or they can not 
operate. It is not so much a question of price with them; the raw 
material must be forthcoming, and a few cents per hundred higher 
freights cut no figure save as higher rates attract " tramp '' steam- 
ships into the traffic. But American flour to retain its foothold can 
not in the very nature of competition and demand afford to pay 
other than minimum rates. 

IMPROVEMENT IN HANDLING AMERICAN FLOUR. 

It is a matter of much satisfaction to note the improved record in 
transportation from American mills to Holland in the past five 
months as compared with the time required the first six months of 
the year and for previous years. The Sloterdyk arrived with flour 
July 9 that had left the mills only forty-six days previously. Her 
next arrival, on August 21, showed fifty-five days from mill. The 
Amsteldyk on September 11 brought flour that made the through 
trip in fifty-three days. The Sloterdyk again, on October 3, ar- 
rived with 21,500 bags only fifty-two days from mill. On November 
21 the Soesdyk delivered 32,300 bags out only fifty-one days. 
The July record of the Sloterdyk was again equaled when she 
arrived November 15 with 65,000 bags that had only left the mill 
forty-six days previously. Unless there is unusual congestion on the 
American railroads or at Atlantic docks, from forty to fifty days 
ought easily to be made from mills to European ports. The above 
showing is for the average time of all shipments in each steamer. 
It is in marked contrast with the eighty-five days to one hundred 
and twenty days average for the first six months and previously. 

The more the Atlantic steamship people study the flour-transporta- 
tion question the more they will see that the features of competition 



NETHEKLANDS. 125 

which American flour in Europe must face are not limited to the 
ordinary items of price and quality, important as they assuredly 
are, but that there is competition of an effective kind in the matter 
of delivery of sales. Flour of Argentine production can be depended 
on to reach Kotterdam thirty days after the shipment is made and 
draft drawn. German flour gets into all ports inside of ten to four- 
teen days. Heretofore American flour has had the benefit of neither 
regular nor quick transit. When the American railroads and At- 
lantic steamship managements having to do with export flour work 
out transit methods applicable to the traffic, making prompt delivery 
to dock and thence inside ten to twenty days to ship, our mills will 
be upon a fair basis of competition with others respecting delivery. 
Such methods of promptness will overcome the irregularities now so 
embarrassing to importers where shipments one and two months 
from the mill arrive ahead of those started twenty to forty days 
previously. Russian, Argentine, and even Japanese mill products 
are developing trade in western Europe. Australia is also forging 
to the front. A few years may see the mills of those countries firmly 
established where the American mills have now some foothold unless 
methods of dependable delivery can be made to characterize Ameri- 
can flour shipments. 

CARELESSNESS IN PREPARING DOCUMENTS. 

Considerable criticism is offered on the lack of care in the prepara- 
tion of bills of lading in America. The through bills used by in- 
terior mills, grain, seed, and seed-meal shippers are often carelessly 
gotten up. I have been shown great bundles of them that no lawyer 
here would recognize as documents of value. Many large dealers 
positively will not give acceptances against such documents, and the 
result is often embarrassing in the extreme to importers who have 
to pay on sight the drafts attached to such papers. Banks in America 
can help tHe smooth operation of export traffic by closer and more 
rigid inspection of the documents passing through their hands and 
indorsed by them. The subject has often been brought to shippers' 
attention, but the carelessness continues right along up to the present 
date. Bills of lading by well-known lines at points as prominent as 
Chicago and Minneapolis continue to be signed by " D," and " H," 
ns representing the authorized agent, instead of by the agent himself. 
However necessary or proper such signatures are at home, they are 
not recognized as legal here, and here is where the documents have to 
stand the final test. The bill of lading, not the draft, is evidence of 
the property, and this evidence should have nothing of doubt or 
uncertainty about it. Seaboard bills of lading should read, " Re- 
ceived on board, etc.," and not " Received to be delivered on board." 
The one means prompt dispatch. The other may mean delay for 
months. But the papers in both cases come through promptly and 
require payment on presentation. 

Another point: The through bills of lading as ordinarily issued 
have nothing on them to designate which is the original and which is 
the duplicate. They are exactly alike. Some large buyers from im- 
porters absolutely refuse to give acceptances until both bills of lading 
so drawn are in haryj. Sometimes the second set of papers is a week 
or more behind the first in arriving. The question is raised by im- 
porters as to why the second bill of lading should not be so marked, 



126 FLOUR AND WHEAT TRADE. 

just as are the second sets of drafts and insurance certificates. Such 
practice once established would remove the present doubt and make 
the course of transactions easier and above captious and other 
criticism. 

LIABILITY OF STEAMSHIP LINES. 

The question of liability of steamship lines where no ships are 
actually owned is one that troubles importers. Some lines that get a 
large business from America charter independent steamers for the 
transportation of their freight bookings. The company itself may 
avoid responsibility by placing its agencies in the hands of ship 
brokers at various receiving points, who, when claims arise, decline 
to adjust until authorized by the company employing them or until 
so ordered by the captain of the offending ship. The expense of get- 
ting legal service on either the company or the ship's captain makes 
the adjustment of overcharges in freight or other claims quite out of 
the question. The arbitrary stand, made possible on this side by such 
lines respecting just claims and covered by insurance, is not fully 
appreciated by American shippers who take no measures when mak- 
ing contracts for such protection as the importer feels entitled to. 
The way to increased exports should be made as smooth and easy 
as possible, and non ship-owning so-called " lines " should be required 
to furnish to shippers some evidence, by bond or other sufficient 
guaranty, that the provisions of the contract respecting freight will 
be carried out. With such guaranty in hand, the American shipper 
can give such assurances as will attract more business by the greater 
confidence inspired. Now the importers, feeling the responsibility 
of errors in delivery or in freight charges resting on them, avoid 
this responsibility whenever they can by diverting their business to 
ports or countries where seaboard bills of well-established lines give 
them full protection. 

The available statistics for the past two years show that the annual 
consumption of wheat flour per capita in the Netherlands is just 
about 50 pounds more than in Germany. This is arrived at by tak- 
ing the average of the two past years after adding the total wheat 
imports and deducting the total exports, adding to their remainder 
the total wheat crop after allowing for seed, and converting the sum 
into flour by taking 70 per cent of it. To this must be added the 
total flour imports after deducting the total exports of flour. It 
seems to figure out approximately^ 184 pounds per capita, or the 
equal of 4 bushels and 23 pounds of wheat at TO per cent extraction. 



NORWAY. 

TRADE WITPI UNITED STATES BAGGING, TRADE-MARKS, AND BRANDS. 

Speaking in trade terms, Norway is a very good customer for 
products of the United States. Her 2,200,000 people buy of the 
United States almost twice as much as the latter buy of them. The 
volume of trade has been steadily increasing in recent years, though 
values in 1907 show slightly less than in 1906, but more than in pre- 
vious years. The published statistics of neither NorAvay nor the 
United States tell the full story of the interchange of traffic, since a 
very large part of the trade both ways passes through the transship- 
ping ports of Copenhagen, Hamburg, and other termini of the large 
ocean line steamships, and doubtless is credited to other countries in 
the statistical make up. 

In the case of flour imports, it is believed by well-informed people 
in the trade that of the 560,000 barrels imported in 1906 fully three- 
fourths of this quantity originated in the United States. The United 
States statistics show 158,3^1:1 barrels directly exported to Norway in 
1906 and 155,698 barrels in 1907, but of the flour exports ascribed to 
Germany (406,000 barrels in 1906 and 616,000 barrels in 1907) and of 
those to Denmark (281,000 in 1906 and 486,000 in 1907), it is more 
than likely that a quantity no less than 250,000 to 300,000 barrels 
ultimately reached Norway each year, and probably more in 1907 
than in 1906. Thus the annual flour trade of the United States with 
Norwav as now established may be properly assumed to be quite 
425,000 barrels. 

EFFECT OF DELAYS IN TRANSPORTATION. 

It is of interest to note that in the opinion of importers they would 
do at least 30 per cent more business with the United States mills if 
the delays at the American seaboard could be done away with and 
transportation time brought down to thirty-five or forty days, mill to 
destination. Packing-house products from Chicago are rarely en 
route longer than thirty days. The method of handling such products 
is so w^ell in hand on the part of American railroads and the steam- 
ship companies that buyers are seldom or never embarrassed by 
delays, and can confidently depend upon not exceeding thirty days' 
transit time. They can not understand why flour should fail of 
similar treatment. I took occasion to assure them of the efforts now 
being made in the United States by the Department of Commerce 
and Labor, the transportation companies, and the Millers' National 
Federation to bring about a decided shortening of time in transit for 
flour. The information was in every case met with expressions of 
satisfaction and evidence of increased interest. The preference is so 
decidedly favorable to American flour that under improved condi- 
tions in trade the increased business with the United States wdll be 
of material importance. In buying in nearly every line, in Norway as 

127 



128 



FLOUR AND WHEAT TRADE. 



in other coimtries visited, the force of the general slack demand has 
been felt. Wiile industry is not prostrated it is greatly depressed, 
and the number of unemployed greater than for a similar period in 
recent years. 

PRODUCTION, IINIPORTATION, AND DUTIES. 

Norway's wheat crop in 1906 was about 302,000 bushels and was 
supplemented by importations of slightly more than 3,000,000 bushels. 
Her crop of rye was about 1,000,000 bushels and rye importations were 
not quite 10,000,000. Of barley there were raised 3,700,000 bushels 
and 5,000,000 bushels were imported. Oats, the largest of Norway's 
grain crops, yielded 11,400,000 bushels and only 867,000 bushels were 
imported. It would appear from the foregoing that the consumption 
of wheat per capita, taking into consideration the production and 
import of wheat and wheat flour, amounts to 2^% bushels, and of rye 
to 4x% bushels. A considerable amount of barley and a small amount 
of oats also enter into human food. It is generally believed that the 
quality and quantity of this year's grain crops are somewhat above 
the average. The 1906 crop was about a normal yield as shown by 
comparison with results of harvests as far back as 1890. 

The duties provided to be levied upon imported food and feeding 
products are according to the following minimum and maximum 
scales, as published July 1, 1908, the figures being in kroner- per 220 
pounds : 



Article. 


Minimum. 


Maximum. 


Wheat 


0.60 

2.00 

.50 

Free. 

.50 

.22 

.40 

1.00 

Free. 

.30 

.30 

Free. 

7.00 

10.00 

.30 


1 00 


Wheat flour 


3.00 


Wheat bran 


2.00 


Rye 


.80 


Rve flour . 


2.00 


Barley 


2.00 


Oats 


2.00 




2.00 


Maize 


.80 




lIo 


Hominy feed 


1.20 


Oil and cotton-seed meal 






9.00 


Rice grits and flour 


15.00 


Rice feeds 


.80 







Figuring the krone at 27 cents, the duty on wheat works out at 
3.87 cents per bushel. Allowing 4 J bushels of wheat to produce a 
barrel of flour the Norwegian miller pays a duty of 17.5 cents on 
the wheat required per barrel. The duty on flour being 2 kroner, 
or 54 cents, per 220 pounds, the duty rate per barrel amounts to 48 
cents. Thus there is a differential in favor of wheat and against 
flour of 30.5 cents per barrel. 

The above computation is on the basis of the minimum duty rates, 
for the reason that the maximum rate is in no case applied, it being 
provided for administrative use in event it becomes necessary as a 
retaliatory measure. 

There is a large consumption of semolina, from wheat, in Norway, 
but the home production only is used. Outside mills can not reach 
this trade, owing to the protective and prohibitive duty of 15 kroner 
minimum and 20 kroner maximum per 100 kilos, equal to $3.68 per 
200 pounds at the minimum rate. 



NORWAY. 129 

Nolwitlistandiiig the high duty on rice grits and flour, there were 
over 24,000 bags of 220 pounds each imported in 1906, and it is 
thought considerabl}^ more in 1907. Ver}^ little of the rice imports 
is thought to come from the United States. There is believed to 
be something of an opening for Texas rice millers and possibly 
others via the direct sailings of steamers from Galveston and New 
Orleans to Christiania. I can not learn of any direct transactions 
in rice products between Christiania importers and American rice 
millers. Packages for rice contain 110 pounds net. They must be 
of heavy closely woven jute matting for the grits or whole grain. 

MARKET CENl'ERS TRANSPORTATION FACILITIES. 

Christiania, the capital, is the largest city of the Kingdom, with 
230,000 population. Its water and dock facilities are good and are 
being constantly improved. Almost one-half of the total imports 
of Norway enter at Christiania. Bergen, a city of 72,000 people on 
the west coast, is second in size and in value of imports. Trondhjem, 
on the northwest coast, with a population of 40,000, Stavenger on 
the western coast, south of Bergen, with 32,000 people, and Chris- 
tiansand, the most southern port of note, with 16,000 population, 
constitute the remaining cities of importance. Coastwise steamers 
by daily, semiweekly, or weekly service handle most of the traffic 
between these cities and to and from the larger Baltic distributing 
points. The railroad facilities between cities are limited, for in 
Norway, with its mountainous and rocky make-up, railroad build- 
ing is exceedingly expensive. Christiania is connected by railroad 
with Stockholm on the east, with Gottenborg and thence to Copen- 
hagen on the south, with Trondhjem on the north coast, and now by 
recent construction with Bergen on the west coast. The new line 
to Bergen, passing through and among high ranges of snowclad hills 
jiud glaciers, with one tunnel 3 J miles long, is expected to assume 
great importance as forming part of a great international mail and 
passenger route between St. Petersburg and northern Russia via the 
Finland cities of Abo or Hango, by way of Stockholm, Christiania, 
Bergen, and thence by steamship connection with England. The 
transit time for the points named to London will be greatly shortened 
as this line comes into use. The lines of rail communication are all 
owned by the Government and there are none of note aside from those 
above named. There are no canals of importance in Norway. 

CHANCES FOR INCREASED TRADE. 

It would seem that in various American products as well as flour 
some materially increased trade might well be worked up in Norway. 
Nearly $93,000,000 worth of foreign-made goods were imported in 
1906. Of this Germany supplied 25 per cent and Great Britain nearly 
28 per cent. The share of the United States was slightly more than 
4 per cent. In flour the trend is decidedly toward the hard wheat, 
sharp, granular products. Fifteen years ago Norway used 75 per 
cent of soft wheat flour to 25 per cent of hard wheat. Now the im- 
ports of flour run full 80 per cent hard wheat. English blended 
flours are getting some foothold and so are German makes of the same 
class. But American hard winter and spring wheat flours are pre- 

2304—09 9 



130 FLOUR AND WHEAT TEADE. 

ferred and will command better prices than blended flours. There 
is some field, however, for the latter. 

A statement similar to the above may be applied to all of the so- 
called " Baltic trade." The trend is the same and trade conditions 
much the same. American flours and other products stand well, but 
it appears to me that the United States is not getting as much of the 
business as it ought to have, considering its facilities and the direct 
lines of communication and ready means of distribution. 

SUGGESTION ABOUT PACKING. 

One point of possible advantage appears to me as applying to the 
sale of American flour in Norway and the whole Baltic trade. It is 
a small matter, but worth consideration. It is in the matter of pack- 
ages that I see America could have a strong " talking point " with 
little cost. The point would be a trade winner. I would advise using 
the heaviest cotton drill goods obtainable, consistent with a slight 
advance in price, for all classes of packages. Jute is most largely 
used. Naturally so, for the Norwegian, Swedish, English, and Ger- 
man mills can not obtain cotton sacks at prices relatively as low as 
jute, nor so low as the American mills can obtain cotton. The poor 
of Norway and all this region need the material in the sacks for 
domestic uses. They do not need the jute. The Norwegian duty on 
cotton sacks containing flour (the sacks are charged a duty as well 
as the flour) is 6.4 cents for sacks covering 220 pounds of flour, while 
a similar quantity of cotton goods not used as sacks would take a duty 
of 27 to 30 cents. Thus it happens that where bakers get flour in cot- 
ton sacks they have a ready and profitable demand for all they can 
sell. The ordinary sheeting used in flour sacks had better be dis- 
placed by a heavier goods, preferably drills, whenever Americans 
ship flour to this territory. They can thus set a pace that competitors 
can not well follow in the matter of price, and the demand will soon 
work around to the flour put up in the best, strongest, and most use- 
ful packages. Economies along such lines are figured out much more 
closely in European countries than in the United States, and if pos- 
sible in this case of flour our millers should take advantage of favor- 
ing conditions. As it is, the English and German mills have to get 
fourpence to sixpence more for cotton than for jute, and I think that 
at this difference American mills can furnish a far superior sack. 
The importers as well as the consumers will appreciate the advan- 
tage suggested. 

TRADE-MARKS AND BRANDS. 

In this connection I would propose as an easy means of advertising 
the origin of the flour or other goods sold here, that the packages, 
whether regular brands or so-called " blind brands," have plainly 
printed upon them in letters as large as possible the words " Made in 
America." The reasons for this are many. Few users can read any 
of the ordinary printed matter on a sack. Many of them don't know 
what " U. S. " means. The words " United States " are very unlike 
the foreign words in use to designate our national name. But every- 
body everywhere knows the word "America," and they know exactly 
what country is meant. It is the best trade-mark our millers or other 
merchants can use. They should use it more freely and more plainly. 
It already indicates a preference, and this should be made the most 



NOEWAY. 



131 



of, for it will prove a constant and effective advertising agency. Then, 
as to flour, the methods of English and German mills, who noAv sim- 
ulate the American package by branding their sacks " Minnesota," 
or " Hard Wlieat," or " Hard Spring," when their countries produce 
no wheat of these characteristics, will lose some of their effectiveness, 
for after all the people prefer to buy of first hands when they can do 
so on a fair basis. 

As showing the growth of the use of wheat flour in Norway I sub- 
mit the following official statement of imports, in kilos of 2.2 pounds 
each: 



Year. 


Kilos. 


Year. 


Kilos. 


1871 


4,150,000 
15,500,000 
31,500,000 


1903 


40, 000, 000 


] ,S85 . 


1906 


42, 000, OUO 


18'J5 


1907 


50, 2C0, UOO 









The wheat imports, which stood at 3,250,000 kilos in 1871, only 
increased to 15,000,000 in 1906-T. Eye flour imports were 12,000,000 
kilos in 1871, increased to 58,000,000 in 1900, but have dropped to 
25,200,000 kilos in 1906-7. 

LOCAL MILLS AND THEIR OUTPUT. 

The mills of Norway are not many and are not large producers of 
wheat flour. All of them grind rye and most of them barley as well, 
while a few are also producers of oatmeal. Considerable attention is 
devoted to the production of semolina, so well protected by heavy 
duty. Two mills at Christiania grind no wheat but produce 800 and 
1,750 bags daily, respectively, the product being the outturn of barley 
and rye. A mill designed for flour and thought to have a capacity of 
700 to 800 barrels daily has recently been erected in Christiania, but 
has not yet been put in operation. It is thought that this mill will 
not operate unless the duty is raised on flour, there being some agita- 
tion to this end at present on the part of interested parties. Within 
(3 miles of Christiania is another rye and barley milling company of 
1,650 bags capacity daily in two mills. This concern is increasing 
its equipment by the addition of another mill for the same purpose. 
Of large wheat flour mills I could learn of but two in the Kingdom — 
one at Bergen of 2,250 sacks daily, wheat and other grains, and one 
at Laurvik operating similarly and of about the same size. 

Positive information in Norway as to the extent of business opera- 
tion is difficult to obtain. The natural inclination is to secrecy. Pos- 
sibly this comes about from the system of income taxation, which for 
state purposes is 8 per cent, and this is in addition to the community 
or municipal tax, which varies in cities according to circumstances, 
but which in Christiania is 13 per cent. Thus incomes in the latter 
city above $160 per year pay, in general terms, 21 per cent tax, 
whether male or female, though a classification exists, there being 
four classes under the schedule according to the size of the family, 
which favors the man of large family and moderate income. 

HOUSE RENTS AND WAGES. 

House rents in cities run from $40 to $60 per room per year. The 
poor live in rented houses of one room, or in exceptional cases of Uvo 



132 



FLOUR AND WHEAT TEADE. 



rooms. Farm rents are considered moderate at the equal of about 
70 cents per acre per year, but varying with the location of lands and 
their condition. 

Below is the scale of wages for various occupations as officially 
published for 1905, the latest publication to date, showing them about 
5 per cent higher than for 1900. This list covers the rates for rural 
communities, and to obtain the city schedule from 20 to 30 per cent 
must be added. The rural scale is as follows reduced to American 
money : 

Per day. Per day. 
$0.40 Machinists $0.89 

.59 Ship carpenters .77 

. 34 Textile workers, male . 64 

. 65^^ Textile workers, female . 86 

.82 House carpenters .81 

. 76 House servants, male, per year 63. 18 

. 88 House servants, female, per year 30. 78 

In the case of house servants, board and clothing are furnished 
free in addition to the wages. Farm laborers have no rent to pay. 
In the other vocations above noted rents for living rooms must come 
out of the wages. 



Farm laborers 

Common laborers, male- 
Common laborers, female- 
Lumbermen 

Mine laborers 

Brickmakers _- 

Glass workers 



SWEDEN. 

CONSU^^IPTION AND PRODUCTION AMERICAN PRODUCTS IN FAVOR. 

The population of Sweden is not far from 5,500,000. Stockholm, 
the capital and largest city, with a population of 340,000, is the 
largest importing point, while Gottenborg, on the southwestern coast, 
with 190,000 inhabitants, is the greatest in volume of exports. 

The consumption of wheat flour in Sweden is a matter of only 
moderate importance, but is believed to be increasing. Rye flour, or, 
more accurately speaking, coarse rye meal, is chiefly used for bread 
making. A considerable percentage of the wheat used is converted 
into a coarse or graham flour, which is, to a large extent, combined 
with the rye meal in making bread. The standard bread in Sweden, 
found on the tables of the Avorking people, and seemingly always 
present on the tables of the best hotels and of the well to do, is a 
peculiar product. It is not a loaf. It is round, about the size of a 
dinner plate, and similar in thickness, and I am tempted to say 
nearly as hard. Apparently no yeast is used in its make-up. Being 
of coarse material, the color is dark. Though wholly uninviting to 
one used to white, spongy, flaky bread, and made more so to the aver- 
age American taste by the presence of caraway seeds in profusion, yet 
to those accustomed to it it is the staff of life. The people of the 
central and northern part of Sweden use mostly this kind of bread. 
In the south more of the softer dark breads are used. These may, as 
in the case of hard breads, be either all rye or a mixture of wheat 
and rye meals. "White bread in loaves, as in America or Great 
Britain, is seldom used. The baking of higher grades of wheat 
flour, aside from its use in pastry and cakes, is largely confined to the 
production of rolls or very small loaves of bread. That the use of 
white flour from wheat is increasing is evidenced by the imports and 
the increasing facilities of the Swedish mills for producing it. 

STATISTICS or PRODUCTION. 

Statistics for 1906 and 1907 upon the production of wheat in 
Sweden are not yet published. The production of 1905, as published 
in the official statistics issued this year, aggregated about 4,500,000 
bushels, of which about 1,100,000 bushels was w^inter wheat and the 
balance spring. This year's crop, which is believed to have been 
secured in good condition, is thought to be much in excess of the crop 
of 1905. The total production of food crops, wheat, rye, oats and 
hay, potatoes, etc., this vear, is estimated by trade authorities to be 
worth $185,000,000, which is nearly $50,000,000 in excess of similar 
crops of 1906, which in turn were thought to exceed those of 1905. 
The excellent crops of this year will, in the opinion of bankers and 
business people generally, do much to restore the country to a normal 
basis or to assist the improving financial conditions, which for the 
past eleven months have been distressingly severe in many lines, but 
which are at present taking on a more favorable aspect. 

133 



134 FLOUR AND WHEAT TEADB. 

Sweden has a milling industry worthy of note and of sufficient in- 
fluence to have secured a protective duty on imported flour, both 
wheat and rye, to an extent sufficient to make large imports of these 
commodities impossible so long as the duty stands. I am of the opin- 
ion, however, that the trade of the American mills now established 
here will materially increase. It should be looked after carefully 
by those interested, for the flour importer in Sweden has much to con- 
tend with in the work of educating the people to a greater use of 
wheat flour. The position of the Swedish mills is a strong one, but 
the methods adopted by them in the sale of flour, are, in some cases, 
such as to encourage outside purchases, and there is now and will 
doubtless continue to be a demand for foreign flour. The sentiment 
favors the Anierican product, and sentiment in Sweden is an im- 
portant factor in the trade. Moreover, the relations with the mills in 
America though limited have been with high-class concerns whose 
goods have given satisfaction to a degi ee that has kept the buyers well 
pleased with their connections. The importing is done by a few 
houses, who in turn sell to the jobbers and bakers, or who, as agents 
for the mills, keep the latter in touch with the buyers. The difl'er- 
ence in language makes this course expedient. 

DISCRIMINATION AGAINST FLOUR. 

Under the existing tariff on flour, amounting to $1.56 per barrel, 
the trade is too small to justify my recommending any general com- 
petition to get it, but I believe that the mills now having the trade 
could profitably study present conditions, for a better understanding 
would bring more business. The Swedish duty ($1.56 per barrel) on 
flour compares with a duty of 27 cents per bushel on wheat, which, 
figuring 4,^ bushels of wheat to make a barrel of flour, is a differential 
against flour of 34 cents per barrel, or at least twice a fair milling 
profit. A reciprocity or commercial treaty between the United States 
and Sweden by which this differential could be reduced in considera- 
tion of reduced duties on some of Sweden's surplus products needed 
in the United States would, in my opmion, add materially to Ameri- 
can exports of flour and benefit Sweden by furnishing cheaper food 
without disturbing a fair profit to Swedish millers. That cheaper 
and better bread, made possible by the introduction of more wheat 
flour and better rye flour, baked by modern methods, would ba a great 
boon to the mass of Sweden's population there can be little doubt. 

There is no duty on mill feeds and none on oats. The present duty 
on maize of 3.T0 kronor per 100 kilos equals 25 cents per bushel. 
Wheat and rye pay the same duty — 3.70 kronor per 100 kilos — which 
figures out 27 cents per bushel on Avheat and slightly more than 25 
cents ipQT bushel on rye. 

LOCAL MILLS. 

There are three mills in Stockholm, one of which is small, but the 
other two can each make close to 2,600 barrels of flour daily. Their 
actual annual output is about 600,000 sacks (220 pounds each), which 
is somewhat less than the daily capacity would indicate. Owing to 
the closed season of navigation, from a month to six weeks, enforced 
idleness results in the winter time. At Kalmar, on the Baltic, south of 
Stockholm, is another large mill of 300 barrels daily capacity. Malmo 



Pounds. 

Whoat flour 16,418,600 

Rye flour 8:58, 200 

Oat meal 09, 500 

Barley products 924, 000 



SWEDEN. 135 

also has a mill of about the same output. At Helsingborg is a mill 
of 1,200 to 1,500 barrels, and one of about 800 barrels daily. Gotten- 
borg has two good-sized plants of 1,600 barrels each per day. Other 
mills of 300 barrels and less are found at numerous points throughout 
the kingdom, and not a few windmills still remain. Nearly all of the 
hirge mills are modern in construction and are equipped for grinding 
rye as well as wheat; and, indeed, the output of rye meal and flour 
doubtless somewhat exceeds that of wheat flours. Thus the actual 
wheat-flour output may safely be put down at half, or less than half, 
of the quantity indicated by the foregoing figures. Some American 
wheat is imported, but of late years the supply has been coming mostly 
from Argentina, Germany, and Russia. Since much of the wheat 
comes in cargoes of smaller ships transferred from the large boats at 
Hamburg, or other German or Scandinavian or Baltic ports, statistics 
are misleading as to ports of origin. Imports are mostly of ttie harder 
varieties of wheat. 

EXTENT OF IMPORTS. 

No statistics for 1907 are yet at hand. The official publications for 
1906 give the following as the imports of that year : 

Pounds. 

Wheat jrrits 2, 244, 000 

Wheat bran 802, G06, 000 

Oil cake 204, 385, 000 

Sundry feeds 55, 141, 000 

The relative importance of Sweden's import of stock- feeding stuffs 
as compared with breadstuffs can be seen at a glance at the above 
figures. Nearly one-half of the total imports of wheat bran came 
from Great Britain, nearly one-fifth from Germany; less than one- 
tenth each from Russia and Denmark. Argentina is not far behind 
the last named, while the United States furnishes least of all, the 
figures for 1906 being but 6,932,200 pounds, or, say, 175 carloads. 

No recent statistics being obtainable owing to the publication of 
such work being nearly two years behindhand, I can only say as to 
the present and recent imports that, in the opinion of well-informed 
people in the trade, the volume was steadily increasing up to the 
early part of the present year. The dull period since prevailing has 
greatly shortened the demand in all lines of enterprise. Stockholm 
has doubtless imported more than one-half, and some think as much 
as three-fourths, of all the imports into the country for the last 
several years. All of this has not been done in direct shipments, but 
has been done through houses whose headquarters are at Stockholm. 

STEAMSHIP AND PORT FACILITIES. 

As there are no direct ocean steamship lines to Stockholm, ship- 
ments, though billed to that city, have to first land at other ports 
from which, in smaller steamers, the service is direct. Flour packages 
are ordinarily jute and cotton 220-pound sacks, and the transactions 
are in what are known to the trade as " English terms." In feed 
the packages are preferably jute 110-pound sacks. 

Stockholm has excellent port facilities and water 100 feet deep in 
its harbor. The approach from the sea, three hours' steaming from 
the city, has a channel 70 feet deep, but at a point nearly midway 
between the city and the sea the channel narrows, and here are the 



136 FLOUR AND WHEAT TRADE. 

fortifications for defense. At this point the channel has been filled 
up until but 23 feet of water is available. This was done as a further 
defensive measure to keep out foreign battle ships, but of course it 
makes the admission of the larger merchant ships impossible. The 
sentiment among the business people is for the removal of the arti- 
ficial obstructions so that commerce may have full sway and Stock- 
holm placed in line for direct ocean traffic. 

I am impressed by the feeling of preference displayed in various 
lines for American products over those of other countries. So strong 
a trade feature should be, and doubtless is, encouraged by our manu- 
facturers, and in my opinion is susceptible of much greater develop- 
ment as the general conditions in Sweden improve. 



THE LEVANT. 

ASIA MINOR. 

BETTER STEAMSHIP SERVICE PROMISED. 

T\"itli the prospect of additional steamship service between ^ew 
York and the Le\'ant at no distant date, there is ground for the 
belief that American products hereafter may be more largely im- 
ported by Smyrna and other Turkish and Greek ports. For some 
years heretofore weekly sailings have been made to Piraeus and 
Patras. Greece, direct from Xew York, but to Smyrna the direct sail- 
ings have not been as frequent or as regular as the possible business 
seemed to justify, so that European exporters, particularly to Smyrna, 
have been able to hold the trade. A Greek steamship line began 
regular sailings with one steamer about two A^ears ago, and its 
second steamer has recently made its initial trip. Another Greek line 
has been running one steamer and has another under contract. A 
practical consolidation of these two Greek lines under the super- 
vision of two of the largest banking institutions of the Levant, and 
with their financial support, promises soon to perfect arrangements 
that will put the Xear East and Xew York in more direct and better 
communication than heretofore. There will be three steamships at 
once, each of 10,000 tons capacity, and later an additional steamer of 
the same size, making regular trijDS between Xew York and Greek and 
Turkish ports. Thus Smyrna, and, it is contemplated, Constanti- 
nople, will have direct American connection. Heretofore cargo for 
those ports by regular liners had to be transferred at intermediate 
ports. Eastern merchants are much pleased with the development in 
near prospect and are hoping that American exporters will give their 
support to the project. 

Regular weekly or fortnightly sailings by such first-class steamers 
as will undertake this service under reliable management should 
encourage American millers as well as other exporters'^to new efforts 
for the large volume of trade that in time may be obtained. These 
arrangements, in connection with the contemplated establishment in 
Xew York of a branch of one of the large banks of the East which 
has branches in the principal Levantine cities, will make the way 
clear for direct financial operations now ordinarily carried on through 
banks in London or Paris. Such a branch bank in the United States 
would also offer all needed facilities for investigation b}^ American 
shippers of the credit and commercial standing of prospective buyers 
in the East, as well as affording similar information regarding ex- 
porters in the United States. The lack of such facilities has doubtless 
tended to retard exx)ansion of trade with America. 

SMYRXA A DISTRIBUTIXG POINT. 

As to Asia Minor, Smyrna is the largest city and most important 
port. AYith a population of 350.000 people. Smyrna is the dis- 
tributing point for an outlying population of 1,000,000 or more. 

137 



138 FLOUE AND WHEAT TEADE. 

Once the Turkish Government becomes modernized, the field for 
development in Smyrna and Asia Minor will offer splendid oppor- 
tunities for investment of capital and for trade. The banks and 
business people generally are progressive and as capable in all essen- 
tials as those of any other country. Yet conditions have been such 
that many modern appliances and conveniences are not permitted. 
There are no public telephones, no electric lights for public purposes, 
and no electric street-car lines. Even the postal service is so unre- 
liable that some half dozen or more post-offices, aside from the 
Turkish, are maintained by the various European powers. Mails 
come and go via British, French, Italian, German, or Austrian post- 
offices, as the interested parties may direct. As there is no mail 
delivery, the business public must call at all of the six or more post- 
offices to obtain its daily mail. 

Still, with all the drawbacks, a vast amount of business is done in 
Smyrna, and Americans are not at present doing as much as they 
might to secure trade. One reason why the buying turns to Euro- 
pean countries instead of to the United States lies in the terms of 
payment demanded by most American exporters, which are either 
cash with the order or payment on presentation of draft. Europe 
gives credit. The interest for the time allowed and the average 
loss in collections are doubtless covered by the invoice price. Taking 
all lines, some of which are sold on 6 months' time, the loss by bad 
debts will average less than 3 per cent yearly. Purchase notes, 
where credit is given, are rarely dishonored. European merchants 
as a rule are glad to cultivate the trade under conditions as they 
exist. In many instances, by reason of the merit of various lines of 
American merchandise, the importers of Smyrna would be glad to 
divide their trade. They would do this, too, on terms that do not 
seem unreasonable, viz, cash payment against documents on arrival 
of goods. With better shipping facilities now available, American 
exporters would do well to alter their methods as to terms. 

UNRELIABLE MERCHANTS TRADE DEVELOPMENTS. 

There are merchants, so called, in Smyrna, and operating at vari- 
ous other ports, who should be avoided. So far as I could do so, 
I have prepared a list of unreliable people who are seeking connec- 
tions in America. [List hied with Bureau of Manufactures.] At- 
tention to some or possibly all of these names has been called by Con- 
sul- General Osman and Consul-General Harris in their reports, but 
these warnings have been disregarded, and only recently losses have 
been sustained by American shippers that would have been avoided 
had the Bureau of Manufactures been consulted before orders were 
placed. When any uncertainty exists our shippers have only to 
consult that Bureau or the consuls before establishing agencies or 
entering orders. Every reliable merchant is known at the consulates, 
and there is no need of American shippers taking chances of loss if 
they will look to the proper authorities for information. The names 
of reliable merchants in flour and other commodities have already 
been supplied by Consul- General Ernest L. Harris and are on file 
with the Bureau of Manufactures. 

Trade development at and about Smyrna is being pushed by Ger- 
man and English houses. The representatives of the latter are about 



THE LEVANT. 139 

to oroanize a local chamber of commerce with a monthly trade 
journal publication on lines similar to the British chamber of com- 
merce at Constantinople, which has been most productive of good 
results to British commercial interests. France has recently estab- 
lished at Smj^rna, in connection with its consulate, a commercial 
agency, which will give special attention to the interests of French 
importers and exporters. 

LOCAL FLOUR MILLS — QUALITY OF PRODUCTS. 

The flour mills in the city of Smyrna number 14, of which 5 are of 
400 to GOO barrels daily capacity. The others are smaller, but, like 
4he larger ones, are equipped with modern machinery. This does not 
mean, however, that they are producing flour that could by any means 
be called high class. The mills are all operated as '' gristhig " plants. 
The owners are natives, but English millers are in some cases em- 
ployed as head millers. Quantity of product, and not quality, is 
sought by the owners, whose interest is to produce the greatest pos- 
sible output of flour for the merchants who furnish the wheat to be 
ground. The mill prospers most that can turn back to the merchant 
the greatest yield. It maj have to convert 85 per cent of the wheat 
into '' flour," and as a matter of fact this is about the ordinary result. 
Much water, by the method of soakino- and washing the wheat, is 
in reality worked into the flour. Various grades of flour are pro- 
duced, but the crushing process is so complete from the first break 
on down the system that the highest grade is dark and badly dressed. 
The superior appliances in the mills are not utilized to produce 
excellence. 

As the European population of Smj^rna is large, there being fully 
100,000 Greeks and probably 50,000 other Christians in the city, it 
would seem that flour of an improved quality, of better strength 
and color, such as American mills might supply, would before long 
meet with a responsive demand. Shipments from Minneapolis and 
a round lot of patent from a Xew York exporter, aggregating about 
4,000 sacks in the past year, as I am informed, have given excellent 
satisfaction to the bakers. This small beginning by Americans, fol- 
lowing some inferior lots from exporters not millers, which were off 
quality and prejudiced the trade against Americans, has given a more 
favorable outlook, which might be aided by samples of hard wheat 
patents and good winter wheat straights direct from mills. There 
are chemical regulations governing flour, aimed against the foreign 
grains oftentimes worked into flour under the existing native system 
of milling, but I am assured that pure wheat flour such as that made 
by American mills has nothing whatever to fear. 

The bulk of the flour imports of the past year came from Bulgaria 
and Roumania. The latter country especially has develor)ed an 
important milling industry, amounting to over 100 modern merchant 
mills, 7 of which have an annual capacity of over 100,000 barrels. 
Close to 30.000 sacks of such flour, most of it of good grade, came to 
Smyrna during 1908. Eussian flour, higher in price, was bought in 
less quantity. It is very strong and fairly well milled, but is the 
highest priced of any imported flour in this market. 

What amount of trade in flour could be depended on in the Smyrna 
district is not easy to answer. The local mill capacity is considerable, 
and this is supplemented by the small native mills back in the country. 



140 FLOUR AND WHEAT TRADE. 

Payment for much of the agricultural labor is made in grain, which 
sujDplies the families of farm help and gives employment to the many 
small mills. There are no statistics compiled by the authorities. 
Probably close to 50,000 sacks was about the full extent of the im- 
ports the past year. AVith a large crop of grain the amount for the 
coming season will be much less, but it might be considerably more 
should the crops fail from drought, as they do about seven years out 
of eight. Considering this fact and that of the inferiority of the 
native product of flour, coupled with the presence of a large popula- 
tion naturally desirous of better bread, there seems to be a reasonable 
prospect for a limited amount of regular business for a few American 
mills, once they establish themselves. 

SOURCE OF WHEAT SUPPLY. 

One great source of supply of the wheat required b}^ the Smyrna 
mills is the Adana district, to the southeast. The principal port is 
Mersina. This district is the scene of great disturbances just at pres- 
ent, thousands of Christians having been slain in the uprising that 
has occurred. The harvest there, now near at hand, may be inter- 
fered with. If so, the supply of wheat for Smyrna might be cut 
short and dependence would fall on the hard, white, durum-like 
wheat grown in the northern j^art of Asia Minor. It is less valuable 
as a bread-making flour than the American durum, so far as concerns 
quality. No wheat being grown in any considerable quantity near 
Smyrna, the mills, with tlieir annual capacity of close to 800,000 bags 
of wheat of 240 pounds each, are dependent for the grinding demand 
on such wheat as can be profitably marketed in the vicinity and 
resold in the shape of flour by the merchants making a specialty of 
this business. Local shortages are thus quickly felt by the mills. 

At present wheat stocks are very low and hard to obtain and mill 
operations are correspondingly slack. The new wheat crop at pres- 
ent seems to promise well though the acreage is quite below the nor- 
mal, since in some districts where the last crop was a failure the seed 
wheat had to be consumed. The high plateaus, generally speaking, 
are the principal grain regions of Asia Minor, and these range from 
3,000 to 5,000 feet in elevation. The plains and valleys near the sea 
level, especially in the Mersina district and elsewhere as well, are 
productive of large grain yields under favorable conditions. It is 
not unusual that the highlands crop of wheat harvested in August and 
September should be quite different in yield from that of the low- 
lands, which is cut in May and June. Both may be good, but gener- 
ally only one can be even partially depended on, and, as heretofore 
stated, neither region is considered sure of sufficient crop to meet the 
entire requirement. So the merchandising of Hour and its importa- 
tion have become fixtures in commercial activities and will continue 
to afford some prospects for mills of other countries. 

Important mills of Asia Minor, outside of Smyrna, are two at 
Denizli, one of which can grind 40 bags per hour, or 1,000 barrels of 
flour daily, suppl5dng the section along the Aidin railroad line 
from Smyrna east to Diner, 320 miles, with extensions to the north 
and south; another at Magnesia, a large steam mill, supplying all 
that part of the country adjoining the Cassaba railway, extending 
somewhat to the northeast of Smyrna, and terminating over 300 
miles distant at Carahissar. Others of notable importance at Mer- 



THE LEVANT. 141 

sina find their markets in the southeastern interior. Xone of their 
product reaches Sm3^rna. 

EATES OF AVAGES — SMALL BAKEKIES. 

Wages are low in the section under review, millers, for instance, 
securing from 40 to 75 cents per day and common labor ordinarily 
about 40 cents, so that bread is the principal article of food. It 
seems to come nearer being the sole staff of life in and about Smyrna 
than in any country or district heretofore visited. On every street 
bakeries are in evidence. They are generally one-oven affairs, but 
every block has from one to four, or more, and the total number in the 
cit}^ must be well into the hundreds. The bakers take especial pride 
in the exhibition of their wares, ovens and display tables all being 
within a few feet of the open shop windows, from which the goods 
are retailed. Even with the inferior flour they have most largely to 
work with, the bread and rolls are well prepared and baked. Ex- 
cejDt for their dark color they would appear appetizing. The com- 
petition among bakers is doubtless such as would welcome the 
stronger and whiter flours of American mills, once the}^ were well 
introduced. 

TURKEY IN EUROPE. 

IMPROVED COMMERCIAL COXDITIOXS. 

The recent convulsions in Turke}^ are without doubt the beginning 
of a great change that will ultimately work out to the betterment 
of all conditions, political, social, and commercial. The development 
of the change is laden with dangers from within and may be com- 
plicated or menaced and delayed by hostile forces outside the Turk- 
ish nation itself, but it is highly probable that in the end stability 
will be assured, commercial enterprise will be rendered possible, and 
investments in railroads, mines, and factories will be given such 
strength and safety as they have never before had. The revolution 
is not made solely for political purposes. The underlying cause is 
the need, so evident to thoughtful men in politics or commerce famil- 
iar with Turkish affairs, of a regeneration and an emergence from 
the environment and customs that have so long kept the country 
back while others have prospered, and which have narrowed the field 
for native ambition and industrial advancement while holding for- 
eign capital aloof. Whatever the final settlement proves to be, the 
opportunities for commercial relations will be greatly broadened 
and firmly established. As Turkey's natural resources are uncovered 
and brought into activity, so will increase the need for greater range 
in trade with the outside world. What part the United States will 
take in supi:)lying this trade will depend on the wisdom of her manu- 
facturers and merchants and the activity they display in seeking to 
meet and encourage the demand that is sure to develop. All Europe 
is alive to these commercial prospects, and competition will not be 
lacking from the da}^ that peace and tranquillity are restored. 
Trained men from all the great centers of production in England, 
Germany, and France are even now. and for months have been, study- 
ing and Avatching the situation and formulating plans for the future. 
In whateA'er lines mechanical art and natural resources haA^e given 
adA'antages to American manufacturers in other European markets, 
the same advantages can and should be folloAved up in Turkey. 
There is apparently no reason to justify a position in the background. 



142 FLOUR AND WHEAT TEADE. 

INCREASED SHIPPING FACILITIES NEEDED. 

In previous reports reference has been made to the improvement 
of and increase in shipping facilities by way of New York and the 
steamship lines that are prepared to offer direct and regular sailings 
to Constantinople. Cargo will be needed both ways to make low 
rates and regular service profitable. Solicitation for this will be 
useless if our exporters and importers do not interest themselves by 
early investigation into the needs and possibilities. 

Much in the way of low-class freight, coal, lumber, flour, struc- 
tural iron,' and machinery is constantly imported, and increased 
quantities of these will follow the new era. In the higher classes of 
tools, agricultural and other implements, finished forms of lumber 
dressed and fitted for building purposes, builders' hardware, furni- 
ture, household utensils, wearing apparel, cased and canned food 
products of various kinds, all of which are imported now and must 
continue to be in still greater volume, the trade of American ex- 
porters is so small as to call for an explanation. If a surplus of 
such commodities exists in the United States, Turkey will offer as 
inviting a market as almost any other distant land. And when the 
similar needs of every port in the populous regions of the eastern 
end of the Mediterranean Sea are considered, the distribution to 
which may be effected by the same direct steamship service as to 
Constantinople, the transportation problem does not seem difficult 
of solution and the incentive for effort becomes plain. 

MARKET FOR AMERICAN FLOUR. 

American-made flour under the old regime in Turkey was practi- 
cally unknown in Constantinople bake shops. Since the constitu- 
tional government assumed control, in July of last year, exporters 
in New York Cit}^ have made some sales. Had prices in Arnerica 
remained nearer the world's parity last winter and this spring, very 
much more business would have been put through. The workings 
thus far, and of late especially, have been in low grades. I know 
of one purchase of American flour just made of 2,500 bags which 
would have been for five times the quantity had the seller been able 
to accept the same price for an increased amount. The demand was 
there at current rates, but speculative manipulation for fictitious 
values in the American wheat market in this instance prevented 
10,000 bags of American flour from being booked for shipment. 

From now on millers need not fear misjudgment of the character 
of their goods by government officials in Turkey. Granted that the 
proper connections are made for the sale of flour (and there is now no 
excuse for other than reliable agents being chosen), the flour will, 
without reasonable doubt, be received and paid for according to 
contract. I am assured by officials and banking people in position 
to know those importers, whose names are on file with the Bureau 
of Manufactures, that their commercial standing and reputation 
for square dealing are well established. Acting as mill agents, 
they will, once prices are adjusted and minimum quantities of various 
grades are placed in their hands for distribution and trial, be able 
gradually to extend their operations and finally to become regular 
buyers themselves in anticipation of the wants of their customers. 
These latter are always purchasers in small lots for bake-shop pur- 



THE LEVANT. 143 

poses, houseliold baking being rare even among the Europeans. The 
local mills, however, are often buyers of large quantities from im- 
porters when local supplies of wheat run short, as they have much 
of the time for two years past. 

FLOUR AND BREAD AT CONSTANTINOPLE. 

The daity flour requirement of the city of Constantinople is placed 
at 4,000 sacks of 74 kilos each (163 pounds), outside of the army 
and navy requirement generally supplied by government mills. Of 
these 4,000 sacks, the local mills ordinarily supply about 2,000 sacks, 
and about 1,000 sacks weekly reach the city from other Turkish mills. 
Thus out of the total annual requirement, nearly 1,500,000 sacks, 
the imports should be between 600,000 and 700,000 sacks per year, 
except in years when the supply of nearby wheat is large. French 
flour has quite the largest trade of any one country, from 250,000 
to 300,000 sacks having been imported last year. Russian flour is 
next in importance, with Roumanian and Bulgarian sorts well rep- 
resented. The last three named are higher in quality than the 
flour from France. San^ples of the latter, representing the greater 
part of French shipments, appear to be of medium to very low grade. 
They are no doubt in many instances a blending of the low grades 
thrown off in the production of semolina from durum wheat and the 
low^er grades of native French soft wheat flour. Such a combination 
of flours is possible under the French administration of the laws 
relating to rebates of duty on exported flour. The blend thus pro- 
duced has fair strenglh and color. German and Argentine flours are 
moderately in evidence. 

Baking requirements in Constantinople call in the main for strong, 
sharp flour. As no yeast is used in native bread, the baker depends 
on the gluten in the flour to make it rise. At best the native bread 
is dark and sour, though the loaves are large and moderately lofty. 
There are many forms of rolls and pastry in which the native in- 
dulges freely, as well as the standard rolls familiar to all Europeans. 
Such baking jDroducts are made from a blend of strong Russian 
patents and the whiter, though slightly less strong, Roumanian 
flours. The latter appears more like the full stock straights of the 
best American mills that grind soft red winter wheat. The Russian 
flour made from hard winter wheat is considered the best now on 
the market and commands the highest price. By hard winter wheat 
is not meant the durum variety, but a variety similar to the Kansas 
hard, as it is loiown in America. From the character of the flour in 
use it would seem that American flours made of spring and winter 
hard and winter soft wheats would readily meet all quality require- 
ments. Samples of various grades should be submitted to importers, 
and the way opened for business before the advent of a new crop of 
wheat in Turkey. 

TERMS OF PAYMENT. 

The terms of payment required heretofore by American flour ex- 
porters are not conducive to business. Drafts have been made pay- 
able at 60 and 90 days' sight in Paris or London, necessitating the 
placing of funds to meet the drafts in such banks promptly on notice. 
This involves loss of interest and ties up capital until the goods 
arrive or drafts mature, aside from the arbitrary charge of one- 



144 FLOUE AND WHEAT TEADE. 

half of 1 per cent for opening up the temporary account. American 
millers' interests would be served to better purpose in opening up 
new connections if drafts were drawn with the usual documents, pay- 
able on arrival through the Bank of Athens or the Imperial Ottoman 
Bank, both at Constantinople. Shipments from other countries are 
made on these or even more favorable terms. Insurance should be 
effected to cover " all risks," so that if one or more sacks are lost, or 
destroyed or damaged in transit proper recovery can be made. 
Objection is properly made to the " 5 per cent free of particular 
average " clause and the ordinary " $75 clause " in insurance poli- 
cies, since on 500 and 1,000 bag shipments the loss or damage of a 
few bags, while absorbing a large per cent of the possible profit, 
would not amount to enough to be covered by forms of insurance 
that require the claims to amount to 5 per cent of the invoice or to 
$75 in the aggregate. Of flour that comes from France every sack 
is insured. Insurance companies offering the " all risks " class of 
indemnity should be asked to extend this facility to the 10,000-ton 
steamships now preparing for regular sailings to Constantinople 
from New York. 

Invoices and drafts should be in terms of English sterling or in 
French money. Some imj^orters will require the former and others 
the latter. Drafts should be payable in London or Paris " exchange," 
according to the money terms in which they are computed, but this 
should not prevent their being sent direct to Constantinople banks 
for collection; otherwise they may be forwarded to London or Paris 
and payment demanded there. They should bear on their face 
specifically the name of the Constantinople bank through which pay- 
ment is to be made. Invoices should show terms and method of pay- 
ment so the consignee may know definitely what to expect. 

In event of the need of arbitration, the advice of the consul-genei'al 
is always available, not for the purposes of deciding on the merits 
of a case, this being contrary to regulations, but for the purpose of 
passing upon the qualifications of those selected to arbitrate, to ihe 
end that fair treatment to American shippers may be assur<id. 
Consul-General Edward H. Ozman has made a special study of the 
commercial needs of the country, is familiar with the merchants, 
and is equipped personally and through his office assistants to render 
invaluable service to American exporters in the development of their 
trade or the proper support of their interests. 

LOCAL MILLS AND OUTPUT. 

The merchant flour mills of Constantinople and immediate vicinity 
are eight in number and built on modern lines, the largest having 
capacity for 3,000 sacks of 74 kilos each per day. Five others range 
from 1,000 to 2,000 sacks daily capacity, and the remaining two 
might make 500 sacks each. None is operated to near its full extent. 
Aside from the above the Government maintains two mills, one for 
the war department and another for the admiralty, having daily 
capacities of 2.000 sacks and 1,250 sacks, respectively, but they are 
not operated with any regularity. For some months the merchant 
mills have not run at over one-fourth time on account of the short 
supply of wheat. Strictly speaking, they are not merchant mills 
except when grain supplies are curtailed. Then tAvo or three of them 



THE LEVANT. 



145 



buy wheat and sell tlie flour, but under conditions of normal supply 
they all simply grind into flour, at a fixed basis rate equal to 6 
cents per bushel, the wheat offered by grain and Hour dealers. This 
method at current rates is productive neither of profits nor of good 
results in the output of flour, notwithstanding the low scale of wages 
paid and the really good wdieat with which they generally have to 
work. As in Smyrna, the competitive effort is to get the greatest pos- 
sible quantity of flour of medium grade from a given amount of 
wheat. This system leads to manipulation of wheats and admixtures 
of lower grades of both wheat and flour that are not calculated to 
promote harmony among the mills. Whereas the gristing rate was 
once 9 cents per bushel, and at this was profitable, it has gradually 
worked down to one-third less, at which no profit can legitimately be 
made. A considerable part of the output goes to points outside of 
Constantinople. 

WAGES CUSTOMS DUTIES ADVERTISING. 

The scale of wages paid on the average per month is as follows : 



Class of workmen. 


Monthly 
wage. 


Class of workmen. 


Monthly 
wage. 




$112. 50 
54.00 
35.00 
15.00 
15.00 
35.00 


Roller men's assistants 


$22. 00 


Engine drivers 


Purifier men. . 


22.00 


Engine-drivers' assistants 


Purifier men's assistants 


13 GO 




Oilers 


13.00 


Packers 


Porters ... 


8.50 






8.50 









The entire office-help expense, aside from salary of owner or 
manager, will not exceed, I am told, $75 per month in even the largest 
mills. For European skilled labor the wage scale provides fairly 
good pay, as wages go in Europe, but for native employees the pay 
is remarkably low. No female help is employed in any capacity. 

The duty on wheat and flour is the same; in fact, all imports pay 
the same rate of duty, viz, 11 per cent. Quotations are c. i. f., not 
including duty or landing terms. Packages for flour are of good 
quality of jute, as in the western European trade. The weight ordi- 
narily w^anted is 74 kilos (163 pounds) to the sack. Some French 
flour comes at a few pounds less, probably by special arrangement. 
Russian flour is often packed at 73 kilos to the sack. 

Advertising of flour and other commodities is generally done in 
the French language, as the majority of the European bu.siness 
people of every nationality speak French, as do many of the native 
Turks. All educated Turkish people converse and write in French 
as well as in their own language. Very little English is spoken, 
though all the larger importing houses are prepared to conduct corre- 
spondence in English. 

Letters designed for Constantinople from America will make better 
time than otherwise if addressed " via London open mail." The 
nations composing the European powers have each a post-office in 
Constantinople, so that choice of routes is possible. The British con- 
nection with London is the most direct for America, being overland 
via Paris in but a few hours over three days. 



2304—09- 



-10 



146 FLOUR AND WHEAT TRADE. 



GREECE. 



COMMERCIAL AND INDUSTRIAL ACTIVITY. 

In concluding this report I wish to call attention to Greece as a 
country to which American exporters may give greater thought in 
view of the prospective increased shipping facilities. Greek com- 
mercial interests are likely to dominate in the entire Levantine trade, 
if indeed they do not now do so. The sagacity and activity of Greek 
merchants have given them, in the minds of less enterprising peoples, 
a reputation decidedly unjustified, but this is entirely apart from the 
fact that they are rapidly developing trade, and the leading mer- 
chants are not only making money but are recognized by those who 
know them best as honest and reliable. With 7,500,000 Greeks scat- 
tered throughout various parts of the world, their trade influence 
is not inconsiderable. The home population is 2,700,000 to 3,000,000. 
Piraeus, one of the principal ports, about 5 miles from Athens and 
with 75,000 population, is the leading industrial center. It has 14 
flour mills and imported about 4,000,000 bushels of wheat in 1908. 
Patras, on the west coast and with a population of 40,000, is perhaps 
the largest export city in the Kingdom. It is the principal trade 
center for the sale of currants and raisins. It has two flour mills. 

Greece is annually importing close to $1,000,000 worth of American 
products, the principal of which are cotton fabrics (sheetings, drills, 
ducks, etc.) , cotton yarns, and petroleum. There are minor imports of 
chemicals, agricultural implements, leather, flour, and machinery, 
which, with well-directed efforts, might be materially increased. A 
very considerable quantity of durum wheat was brought into Greece 
from the United States through a Paris house in 1908, and some ship- 
ments direct from New York and Duluth were said to have been mar- 
keted in Patras, Piraeus, Syra, and Volo. Ordinarily the milling 
industry, which to a large extent is making semolina and macaroni 
products, obtains its supplies from Kussia and Roumania. American 
flour has obtained a respectable foothold. 

The present shipping service from New York to Patras is weekly 
sailings by the Austro- American a Steamship Company and irregular 
sailings by English, French, and Greek lines. By the consolidation of 
the Greek lines, heretofore referred to, the facilities will be greatly 
increased, if the trade development follows as is anticipated. Gen- 
erally speaking, the importing houses are prepared to conduct their 
correspondence in the English language. 

Packages of flour for the Smyrna, as well as the Greek, trade seem 
to vary in weight, to meet the peculiar requirements of the importer. 
Some are as small as 60 kilos (132 pounds), while others, and in the 
majority of cases, I think, are full 100 Idlos (220 pounds). For 
mountain transportation by donkeys and camels doubtless the smaller 
package may be wanted. The material generally in use is jute. As to 
terms of payment for flour, I recommend draft payable on arrival, 
documents attached as usual, drawn in English money. 

EGYPT. 

A GOOD FIELD FOR EXPLOITATION MARKET FOR AMERICAN MILLS. 

Egypt presents a field for interesting study to the commercial 
student. American manufacturers of various lines for export, as Avell 
as flour-exporting mills, may depend on Egypt as a responsive market 



THE LEVANT. 147 

as time goes on, and that in the near future. At present the reaction 
from the inflated specuhitive conditions prevailing in Egypt from 
1904 to 1907 has brought about a period of liquidation and trade 
dullness which, in general merchandise, is likel}^ to continue for 
another year. Stocks of most descriptions are heavy and difficult to 
dispose of. Many failures have naturally followed, but banking- 
interests have pursued a lenient and conservative policy, which not 
only has prevented needless loss but has given encouragement to 
those who, although temporarily carried off their feet by the boom 
of tAvo years ago, have really been most important factors in the 
development Egypt has made in recent years. The various interests 
seem to be standing together until such time as the natural resources 
and forthcoming demand will absorb the present accumulation and 
restore normal conditions. In the meantime the actual need for food 
staples, particularly flour, is not lessened. Indeed, as to flour, the 
imports and consumption appear by the official statistics to have been 
considerably increased in 1908 over previous years. 

Great Britain, in most lines of requirements but not in flour, ap- 
pears to have decidedly the foremost position. ^Vliile in truth Egypt 
is not a part of the British Empire, the connection in the matter of 
government and vital business interests is closer than is the case in 
recognized British colonies. British advisers have stood behind the 
nominal heads of executive and other departments since 1883. Egypt 
has greatly benefited by this semicontrol. State finances are on a 
solid footing. The development of agricultural possibilities, the infu- 
sion of business acumen into the more advanced natives, the fortunes 
made by the phenomenal advance in real estate values in which 
original native holders as well as subsequent buyers have participated, 
and the influx of foreign capital that has made possible what sub- 
stantial gain has been accomplished in values, have all been brought 
about by the sense of security afforded by British occupation, so to 
speak, and the wise control that has in the main been exercised. 

MARKET FOR MANUFACTURED STAPLES. 

Grain raising, formerly the country's chief industry, has given 
place to the growing of cotton of a suporior quality and in yearly 
increasing quantity. With the vast additional facilities for irriga- 
tion in course of construction, the Nile Valley (which is all there is 
of Egypt from a productive point of view) will constantly grow in 
population and trade for many years and by an increasing ratio call 
upon other nations for many manufactured staples. Hence, my rec- 
ommendation to American manufacturers of all materials suitable to 
the climate and the needs of a growing people is to familiarize them- 
selves with the commercial status in Egypt and to establish their 
connections before the field for enterprise is completeh^ appropriated 
by competitors. Obviously the best way for our exporters fully to 
grasp the proposition is to give it personal study, Avith a vicAv of 
comprehending the probable needs of a rapidly progressing nation, 
just as has been done by the English, French, German, and Greek 
merchants who now have their agencies and branches in splendid 
working order. 

Egypt imported over $125,000,000 Avorth of merchandise in 1908, 
as against $100,000,000 in 1904, and this in the face of the panic 
conditions prevailing in 1907 and the liquidation following to the 
present time. The exports for 1908 exceeded those of 1904, but were 



148 



FLOUR AND WHEAT TEADE. 



less than in 1907 and 1906. They amounted to slightly more than 
$105,000,000 in 1908, as against $140,000,000 in 1907. Of the imports, 
Great Britain furnished in 1908 not quite 33 per cent, France almost 
12 per cent, Turkey not quite 13 per cent, and Germany and Austria 
about 11 per cent. The share of the United States in this $125,- 
000,000 worth of requirements was too small to be mentioned in the 
newspaper publication of official statistics, though it actually 
amounted to about 1 per cent. In the way of exports, Italy and Bel- 
gium each did five times more business with Egypt in 1907 and 1908 
than did the United States. 

IMPOETS OF FLOUR SOUECES OF SUPPLY. 

Flour made in America is adapted to Egyptian requirements, but 
our shipments were only 30,385 sacks of 220 pounds each in 1908 out 
of the 1,706,751 sacks im]3orted. To show the sources of Egypt's 
supply as well as to give some idea of the qualities furnished by the 
various countries, I submit the following table of principal flour 
imports for 1908, which exceeded those of 1907 by 180,000 sacks : 



Countries. 



Sacks (220 
poiinds). 



Value 
(Egyptian 
poirnds). 



Approxi- 
mate value 
(United 
States 
dollars). 



United States 

France 

Great Britain. 

Germany 

Belgiimi 

Bulgaria 

Italy 

Roumania. . . . 
Russia 



30, 385 
, 082, 509 
299, 935 
34,472 
29, 118 
11,327 
75, 367 
30, 495 
94,445 



£29, 055 
, 107, 235 

292, 045 
37, 559 
21,437 
12, 983 
72,821 
35,475 

124, 607 



$145, 000 

5,536,000 

1,460,000 

187', 000 

107, 000 

64, 000 

364, COO 

177, 000 

623,000 



It will be observed from the above that, taking an Egyptian pound 
of practically $5 as the valuation per sack of flour, the English, Bel- 
gian, American, and Italian shipments fell below the average value 
and were doubtless largely lower grades, while the German, Bul- 
garian, Koumanian, and Russian shipments exceeded the average 
and were probably higher grades. This is notably true of Russian 
flour, which thus far has been considered the highest quality im- 
ported. The imports from France, by far the largest from any 
country, are largely low grades, but there are imports enough of the 
medium and higher grades to bring up the average. I can not find 
that any really high grades come from Great Britain. Mills at 
Liverpool are enjoying the major part of the English trade in flour. 
French shipments, and most that comes from Italy, are in whole or 
in part the flour made in the process of making semolina from the 
durum variety of wheat. Such flour is a low grade, but fairly strong, 
and is in many cases, I think, blended by the mills with the better 
class of low and medium grades from soft wheat. Such flours can 
not readily be matched by many American mills, since, as a rule, 
the hard and soft wheats are not grown in contiguous territory. 
Some of the mills in the Central States where both hard and soft 
wheats are grown might successfully go after this trade in blended 
flours in both low and medium grades, particularly right after har- 
vest and before the later harvests of Europe afford the Continental 
mills the needed wheats. Later in the season the wheat exports from 



THE LEVANT. 149 

the United States, followed by those from other countries, will supply 
the British and Continental mills, especially those of Germany, France, 
and Ital3^ which are helped by government bounties, with the neces- 
sary low-priced materials that may enable them to undersell Ameri- 
cans. The advantage of earlier access to the new crop should be made 
the most of in building up trade in Egypt as well as for maintaining 
trade in Europe. 

SHIPMENTS THROUGH ALEXANDRIA. 

Of the entire Egyptian imports nearly nine-tenths enter at Alex- 
andria. Port Said and Suez absorb most of the remaining tenth, 
with the former taking about double that entered at the latter port. 
In flour $7,658,000 entered at Alexandria and $1,062,000 at Port 
Said. No other port received anv flour shipments of consequence. 
Eo-ypt's population is between 10,000,000 and 12,000.000. Alexandria 
haV about 500,000 inhabitants and Cairo about 750,000. The Euro- 
pean population is large in both these cities. Some business might be 
done direct with Cairo, but I think it would be wise to confine efforts 
in flour-trade extension, for the present at least, to Alexandria. The 
list of possible buyers or mill agents is not large, and of these some 
can not corres]3ond in the English language. Of those who can do so 
some are closely connected with the mills of other countries. I inclose 
the names of such as are especially interested in American products 
and who are in jDosition to give good service, both as sales agents and 
as binders, to millers in the United States. After exchange of samples 
and agreement upon desired grades and marks, more than usual super- 
vision should be exercised by managers to see that all conditions as to 
packages and quality of flour are complied with, and that subsequent 
shipments are exactly like the initial lot. The native merchants, to 
whom the importer or mill agent must sell, and the native baker, who 
is the final buyer of the flour, must be given no occasion whatever for 
loss of confidence. Once a mark obtains a foothold it will be wanted 
regularly, but if it proves a disappointment to the baker he will not 
call for it again. 

THE BREAD INDUSTRY. 

The bread and general baking trade in the two large cities of Egypt 
(and there are several native Arab cities of over 100.000 population 
and many smaller) needs to be brought in contact with more modern 
ideas and better grades of flour than the inferior products marketed 
there b}^ France and Italy. Even at the best hotels and restaurants, 
patronized and sustained by Europeans and American travelers, the 
bread and rolls are dark, hard, and crusty. There is a lack of clean- 
liness and tasty, light appearance to this important food product in 
Egypt that the advent of good medium and high-class American 
flours would soon overcome. I am convinced, from a year's observa- 
tion in Europe, that the more advanced and progressive communities 
everywhere may easily be distinguished by the character of the bread 
baking. The whiter and more tastefully prepared the bread and rolls 
appear to be, the more energetic and progressive the people, whose 
demands in bread, as in other needs of life, call for the best obtain- 
able. The rapid progress made in Egypt and the civilizing influence 
of the many hundred thousands of the advanced type of Europeans 
and Anglo-Saxons are sure to cause a displacement of the rough, 
coarse food products now so largely supplied in conformity with the 



150 FLOUE AITD WHEAT TRADE. 

ancient customs of the natives. The latter, rapidl}^ improving socially 
and financiall3% are acquiring tastes in line with modern ideas of life. 
S^^stematic advertising and other advanced trade methods would 
soon work a decided change as to bread, for the people are ready for 
a change. 

Milling as carried on in Egypt does not need to be reckoned with 
now. There are less than a dozen modern mills in all Egypt, and 
none of more than a few hundred barrels daily capacity. They are 
mostly owned by Arabs, and, generally speaking, the machinery was 
furnished by German mill builders. In 1908 they ground mostly 
imported wheat, of which about 600,000 bushels came into the coun- 
try. Some flour, 7,616 sacks, was exported, half of which went to 
England and most of the balance is ascribed to Germany, probably 
for ship supplies. Native labor is employed in the mills, the rate 
of wage being low, 5 to 10 piasters (25 to 50 cents) per day. The 
wheat grown in Egypt, the quantity of which is no longer large, is 
mostly ground in the primitive wind or hand mills of the natives. 
The small surplus in 1908, valued at $135,000, was exported mostly 
to Turkey, England taking but $3,500 worth. 

SHIPPING FACILITIES MATERIALS FOR PACKAGES. 

The shipping facilities from the United States have improved 
materially in the past three years, and arrangements are now under 
consideration by interested steamship owners for still better and more 
direct service. At present shipments via Liverpool would probably 
make the best time, though the German and Italian lines, which 
transship at Genoa, are said to be giving good service between New 
York and Alexandria. The Navigazione Generate Italiana, or as it 
is commonly called, the " Rubbatino Line," has a fortnightly service 
from New York to Genoa and a weekly service between Genoa and 
Alexandria. 

As to packages, jute is mostly used, as the strength of material in 
the ordinary sack of 80 okes of 220 pounds is severely tried by the 
frequent handling necessary. If prices would admit, a good sheeting 
sack distinctively printed and inclosed in a standard jute case would 
Sui:^iO|dx9 oraos joj raooj si Q.iaqx '^nnipara SiiispJ9A])B poo.§ e 9A0jd 
of ideas as to sacks and their advertising features, as the printing on 
most of the jute flour sacks now used by European mills is so poorly 
done as to be valueless as an advertisement. While the standard 
weight is 80 okes, or exactly 220 pounds and 11 ounces, much of the 
flour from England, France, and Russia is only packed at 216 pounds. 
It is thought tiiat reliable, full-weight packages from America at 220 
pounds would inspire confidence with the bakers, who know they are 
not now getting full weight, but who are powerless to change the 
practice. 

Millers desiring to open trade with Egypt should send full lines 
of samples to buyers and agents whose names are on file at the Bureau 
of Manufactures. Not all who apply can be taken on by the im- 
porters, for the work of building up trade must proceed slowly under 
present conditions, but I feel satisfied that such as secure a good start 
will develop a growing outlet. 



THE LEVANT. 151 

FACILITIES OFFERED AT ALEXANDRIA. 

The greater part of my stay in Egypt was spent in making familiar 
with American mill methods the feAV merchants who seemed disposed 
to handle our goods. There are only three that I care to recommend 
as showing capacity and a desire to Avork for trade. These three are 
ver}^ enthusiastic over the trade prospects as they will develop a little 
later on, and having a good knowledge of America and speaking the 
English language, as well as Arabian, French, and German, they are 
the people American mills should do business with. 

In making shipments to Egypt, invoicing and drafts should be in 
English terms and drafts should be drawn at sixty days' sight, pay- 
able in London exchange, but collectible at Alexandria, documents 
attached as usual. I am convinced from investigations at both Alex- 
andria and Cairo that it is unwise to try to do direct business with 
both j^laces. Alexandria is the great port, and the merchants there 
would be displeased and disturbed in their trade arrangements if 
American dealers tried to work both cities. It is better to give over, 
to Alexandria the matter of developing trade in Cairo. 






TRANSPORTATION. 

SHIPMENTS TO HAMBURG. 

STEAMSHIP COMPANIES CAUSE DELAY. 

Following are figures showing the facts as to certain shipments 
of feeding stuffs, largely the onals of corn products, from interior 
States east of the Mississippi River to the port of Hamburg. The 
shipments were those to a single firm in Hamburg and are given in 
the order in which they went forward. In most cases quite reason- 
able time was made from point of origin to seaboard, but the delays 
at seaboard, while only reasonable in some few^ cases, appear in the 
majority of instances simply inexcusable. The dealer here naturally 
asks how he can be expected to build up or extend trade in American 
products when so little care is given on the part of the steamship 
companies to expedite goods placed at their disposal. In the cases 
cited the blame can not be directly laid to the railroads, for their 
handling of the goods was in reasonable time; but as parties to the 
bill of lading, and as being interested in the maintenance and expan- 
sion of our foreign commerce, they must see that their responsibility 
does not end with delivery to the seaboard. Whatever will tend to 
remove the obstacle of delay in transit will surely tend to build up 
foreign commerce and increase railroad revenues. 

RESULTANT LOSSES. 

In the few cases under review, which form only a small part of all 
the shipments of American products into Germany, the loss oc- 
casioned was no less than 18,000 marks (nearly $4,500). A few ship- 
ments came through promptly and made no loss. Most of them being 
delayed at the American seaboard from thirty to seventy days caused 
cancellations of contracts and resales, loss in profit and interest, and 
an endless amount of friction between the parties at this end. It 
should be understood that in Germany the law of the land is such 
that a dealer buying of an importer for specific delivery Avithin a 
reasonable time must or may grant an extension upon request when 
goods have not arrived, but failing to receive them upon the expira- 
tion of such agreed extension, he may cancel the contract and receive 
bonification of the amount of profit he would have received had the 
goods arrived as originally contracted. Such enforcements of terms 
were required in the cases cited, and a further loss was occasioned 
by the markets having severally declined by the time the goods held 
at the American seaboard could be delivered, and the resales upon 
arrival had to be made far below the original cost prices. There 
were complications on all sides before any settlement could be effected 
that were most discouraging, and the question of wdiere the loss must 
finally rest is not yet decided. 

]52 



TRANSPORTATION. 153 

RESPONSIBILITY FOR DELAYS. 

Buyers feel that some sort of protection must be provided in the 
contract for freight, so that whoever is responsible for delays may 
be obliged to stand the loss occasioned by neglect. They can not deal 
in such uncertainties as exist with regard to transactions with inte- 
rior shippers without a much wider margin of profit, and this being 
impossible they will more and more seek, as they have of recent years, 
the newer sources of large supply in Argentina. In that country no 
such difficulty as with the United States is experienced. All ship- 
ments are made on seaboard bill of lading. Invoices are dated with 
the date of the steamer's sailing. Buyers and their customers can 
base their dealings on the known regularity of the ship's transit time. 
With purchases in the United States there is no knoAvn regularity. 
On the contrary it is all uncertainty, and in such disrepute are the 
facilities as at present existing for transportation that, instead of 
having the preference as the capabilities of the American shippers 
would justify, they are limited to such quantities and orders as can 
not be elsewhere placed. The trade exists, but it is sorely handi- 
capped. In the interest of the great possibilities for the growth of 
commercial relations between the millers and shippers of feedstuffs 
in the United States and the distributers of such products in Ger- 
many, it is sincerely hoped that the importance of avoiding delays 
in transit may be forcefully brought to the attention of the railroads 
and steamship companies and their agencies at the various American 
ports. The term of " ship's option as to date of sailing," if forming 
a part of the freight-rate contract, should be construed to cover only 
reasonable and necessary delay. It should not be used to cover every 
convenience of the steamship and deprive the parties originating the 
commerce of every chance for profit. 

STATEMENT OF DELAYED SHIPMENTS. 

The appended statement gives specifically the date of shipment, 
date of arrival at seaboard, and date of clearance, showing also the 
number of days of delay at seaboard in the case of each shipment. I 
desire to invite especial attention to the few cases where the seaboard 
delay was less than two weeks, as well as to the fact that the majority 
of the lots were allowed to lie on dock over thirty days, and some 
more than two months. Such cases as these are common. The com- 
plaint is general wherever a large business is done. It is not neces- 
sary to burden these reports with examples of which the one attached 
is only one of the many that might be furnished. 



154 FLOUR AND WHEAT TRADE. 

SHIPMENTS VIA PHILADELPHIA PER COSMOPOLITAN LINE. 



Date of 


Bill of 


invoice. 


lading. 


1907. 




Oct. 6 


176/7 


18 


179 


18 


722 


21 


181/2 


25 


737 


28 


742 


Nov. 1 


188 


1 


746 


1 


186/7 


1 


185 


1 


749 


2 


583 


8 


774 


9 


587 


11 


588 


11 


191 


13 


589 


26 


595 


26 


203 


Dec. 7 


209 


16 


609 


16 


923 


30 


623 


1908. 




Jan. 13 


10/11 


14 


12 


15 


80 


18 


16/7 


20 


18 


22 


19/20 


22 


21 


25 


108 


26 


112 


29 


22 


Feb. 1 


26 


1 


23/4 


3 


30 



Port. 



N'fahrwasser . 

Stettin 

N'fahrwasser . 



Stettin. 



.do 
.do 



.do 
.do 



.do 



do 

do 

do , 

do 

N'fahrwasser 

do , 

Stettin 

do , 

do 

do 

.....do 

N'fahrwasser 
Stettin 



N'fahrwasser , 



Stettin 

do 

do 

do 

do 

do 

do 

do , 

N'fahrwasser . 

Stettin 

do 

do , 

do 



Article. 



Homco 
..do... 
..do... 



.do. 



do 
.do 



.do, 
.do 



.do 





Arrived 


Cleared 


Sacks. a 


at sea- 


at sea- 




board. 


board. 




1907. 


1907. 


1,334 


Oct. 24 


Nov. 5 


667 


30 


Dec. 4 


2,000 


22 


Nov. 5 
1908. 


2,000 


Nov. 5 


Jan. 7 
1907. 


2,000 


Oct. 30 


Dec. 4 


2,000 


Nov. . 2 


4 

1908. 


2,000 


18 


Jan. 7 


2,000 


5 


7 
1907. 


2.000 


6 


Dec. 4 
1908. 


2,000 


15 


Jan. 7 


2,000 


7 


7 


2,000 


15 


7 


2, 000 


15 


7 


2,000 


24 


7 


1,334 


27 


7 


2, 000 


29 


7 


2,000 


30 


7 


1,334 


Dec. 15 


7 


2,000 


18 


Feb. 15 


1,334 


19 


15 


1,334 


30 


Mar. 6 


2,000 


22 
1908. 


Feb. 15 


2,000 


Jan. 15 


Mar. 6 


1,334 


27 


6 


2,000 


27 


6 


2,000 


28 


6 


2,000 


Feb. 5 


6 


1,334 


5 


13 


1,334 


8 


13 


2,000 


7 


6 


2,000 


3 


6 


500 


3 


6 


2,000 


14 


4 


2,000 


15 


13 


1,334 


13 


6 


2,000 


19 


23 


63, 173 







SHIPMENTS VIA BALTIMORE PER HAMBURG-AMERICAN LINE. 



1907. 




Aug. 15 


645 


15 


636 


19 


594 


21 


600 


22 


346 


23 


633 


Sept. 2 


649 


6 


668 


14 


88/378 


14 


687 


16 


A 89 


20 


A 90 


26 


A 91 


Nov. 4 


757 


6 


766 


11 


776 


12 


92/420 


14 


A 93 


16 


803 


16 


590 



Hamburg 

....do 

....do 

....do 

....do 

....do 

....do 

....do 

do 

do 

do 

do 

do 

do 

....do 

N'fahrwasser , 

Stettin , 

.....do , 

do 

Hamburg 



Cake ... 
...do.... 

Homco . 
...do.... 
...do.... 
...do... 
...do..., 
...do..., 
...do... 
...do... 
...do... 

Cake .. 
...do... 

Homco 
...do... 

Cake . . 

Homco 
...do... 
...do... 

Tonca . 





1907. 


1907. 


500 


Sept. 16 


Oct. 14 


500 


13 


7 


2,000 


Aug. 28 


Sept. 10 


2,000 


Sept. 6 


Oct. 1 


2, 000 


14 


1 


2,000 


11 


1 


2,000 


11 


7 


2,000 


23 


14 


2,000 


Oct. 4 


23 


2,000 


Sept. 30 


23 


1,334 


Oct. 9 


23 


500 


10 


Nov. 10 


500 


Nov. 18 


10 


2,000 


7 


27 


2,000 


1] 


27 


1,000 


19 


Dec. 22 


2,000 


24 


22 


667 


24 


22 


2,000 


23 


31 


667 


30 


22 1 



a 110 to 220 pounds each. 



TRANSPOKTATION". 155 

SHIPMENTS VTA BALTIMORE PER HAMBURG-AMERICAN LINE— Continued. 



Date of 


Bill of 


invoice. 


lading. 


1907. 




Nov. 19 


434/91 


21 


592 


Dec. 2 


855 


4 


868 


14 


478/92 


20 


613 


21 


616 


23 


617 


27 


618 


30 


620 


30 


622 


31 


975 


31 


624 


1908. 




Jan. 2 


32 


24 


102 


Feb. 1 


139 


3 


151 



Port. 



Stettin. 



Hamburg 
....do... 
....do... 



do Homco 

Stettin Tonca . 

do '. do .. 

do Homco 

do do.. 

Hamburg I Tonca . 

do ' do .. 

do Homco 

Stettin do .. 



Article. 



Homco .. 



Tonca . 
Homco 
Cake . . 



Hamburg. 
....do.... 
....do.... 
....do.... 



Cake . 
Home; 
....do. 
....do. 





Arrived 


Cleared 


Sacks. 


at sea- 


.at sea- 




board. 


board. 




1907. 


1907. 


2, 6000 


Nov. 28 


Dec. 22 
1908. 


67 


Dec. 4 


Jan. 9 


2,000 


12 


Feb. 29 


1,000 


10 
1908. 


Jan. 9 


1,3;!4 


Jan. 4 


Feb. 29 


667 


6 


29 


667 


8 


29 


' 2, 000 


10 


Mar. 7 


2,000 


14 


7 


667 


15 


7 


667 


15 


7 


2,000 


18 


7 


1,334 


22 


7 


500 


14 


7 


1,334 


31 


21 


2,000 


Feb. 4 


21 


2,000 


11 


21 


52,505 



Delav. 



Days. 



SHIPMENTS VIA PHILADELPHIA I'ER SCANDINAVIAN-AMERICAN LINE. 



1907. 




Aug. 15 


574 


Sept. 18 


700 


18 


169 


19 


170 


24 


171 


26 


172/3 


27 


712 



Stettin. 
....do. 
...-do. 
....do. 
....do. 
....do. 
....do. 



Homco 
...do.. 
...do.. 
...do.. 
...do.. 
...do.. 
...do.. 





1907. 


1907. 


1,334 


Sept. 6 


Sept. 15 


2,000 


Oct. 8 


Oct. 19 


2,000 


23 


Nov. 15 


1,334 


23 


15 


2,000 


Nov. 3 


Dec. 11 


2, 000 


Oct. 20 


Nov. 15 


2,000 


15 


15 


12, 668 



SHIPMENTS VIA PHILADELPHIA PER HAMBURG-AMERICAN LINE. 



1907. 




Aug. 20 


147 


22 


152 


Sept. 7 


578 


Nov. 1 


745 


5 


760 


6 


585 


6 


584 


Dec. 12 


210 


14 


606 


19 


612 


30 


968 


31 


84 


1908. 




Jan. 24 


24 



Hamburg 

do 

....do 

N'fahrvvasser . 

do 

Hamburg 

do 



.do 
.do 



do 

N'fabrwasser 
Hamburg 



.do 



Homco 
...do.. 
...do.. 
Cake . . 
...do.. 
Homco 
...do.. 



.do 
.do 



...do.. 
Cake .. 
Homco 



.do, 





1907. 


1907. 


2,000 


Sept. 10 


Oct. 10 


2,000 


14 


10 


2,000 


Oct. 8 


22 


1,000 


Nov. 6 


Dec. 4 


1,000 


12 


4 


2,000 


20 


9 


667 


20 


4 
1908. 


1,334 


Dec. 24 


Jan. 10 


2,000 


28 
1908. 


18 


2,000 


Jan. 10 


Feb. 17 


500 


6 


Jan. 31 


2,000 


26 


Feb. 17 


2,000 


Feb. 10 


Mar. 9 


20, 501 



27 



RESPONSIBILITY FOR DELAYS. 

I regret that in the cases referred to I could not at the time 
obtain from the consignees data showing date of arrival at sea- 
board. Consignees know from the documents attached to the drafts 
they pay the date the initial railroad company receipts for 
the shipment. This to them is sufficient evidence that the flour has 
been shipped according to contract with the miller, and the draft 
has to be paid upon presentation if a sight draft, or within 60 days 



156 FLOUR AND WHEAT TRADE. 

if drawn " at 60 days sight." Other details pertaining to the ship- 
ment do not, in the ordinary course of events, come to the notice 
of the consignee. He has no information as to where the flour is 
at any time en route; if delayed, when it will leave the seaboard. 
The complaint has been general that no means are afforded for locat- 
ing a shipment or hurrying it forward. Tracing reports, when re- 
quested, are slower in coming to hand than the shipments themselves. 
It is the helplessness of the European importers to obtain informa- 
tion as to shipments en route, or to hurry them along, that has proven 
so disheartening to them. 

RAILROAD FREIGHT MANAGERS CAN LOCATE DELAYS. 

While I can not furnish the data referred to, I beg to say that every 
railroad having to do with export flour has in its general freight 
offices copies of all the billings for export and records showing exact 
date of receipt of such shipments by the connecting steamship com- 
panies. It will be comparatively easy for them to locate the date 
of shipment and date of arrival at seaboard of every car of flour 
exported. I trust there will be some concerted action of the trunk 
lines and the inland fast- freight lines to compile the data touching 
export flour, showing date of shipment from initial point, arrival 
at seaboard and departure therefrom, covering a period, say, from 
November 1, 1907, to July 1, 1908. Any prominent flour-sjfiipping 
point in the middle west may be taken for demonstration, say Kansas 
City or Minneapolis, and the interior exporting towns tributary 
thereto, with destination to London, Glasgow, Leith, Bristol, Amster- 
dam, Rotterdam, Hamburg, when the truth of the general complaint 
of consignees as to delays in transit will impress itself on such official 
as will cause such investigation to be made. 

UNFORTUNATE AND HARMFUL CONDITIONS. 

If the railroad managers will earnestly go at this subject and cause 
the necessary abstracts to be made of flour-export shipments, I have 
no doubt but that they will not only be surprised but will hasten 
to do what they can to rectify the unfortunate and harmful condi- 
tion that has been so long a menace to American flour trade abroad. 
As I have frequently said, the railroads are less to blame than the 
steamship lines, but with the facts before them they can bring more 
pressure to bear on the latter for improved service than any other 
influence. As parties to the through bill of lading and as interested in 
the building up of the export traffic, no more than a suggestion to 
them should be necessary to bring about the needed action on their 
part. I do not think the Department of Commerce and Labor should 
be looked to for data, when all the evidence is already in the hands of 
the railroads, whose files would have to be sought no matter who 
instituted the inquiry. 

THE REALLY IMPORTANT QUESTION. ' 

I am glad to be able to say that since the first of July, 1908, there 
has been little cause for complaint as to delays. But what buyers 
on this side desire is evidence that some permanent system will be 
adopted by both railroads and steamship lines, that will render 
unlikely in the future the inexcusable long periods en route, which 
have been the practice in the past. 



TRANSPORTATION. 157 

No other commodity of large export fluctuates more in value than 
flour. It is vital to buyers that the open period, while flour is in 
transit, be cut down to the lowest possible minimum. Otherwise the 
trade will buy more from countries other than the United States, 
whence deliveries are more quickly made and in a more dependable 
manner. 

If I may be permitted to say, the really important question is not 
that of substantiating data in the instances reported, but that of the 
railroad managers and steamship people getting together in due 
recognition of a radical trade evil for which they are responsible, 
and formulating some reasonable plan for overcoming it. 

SHIPMENTS TO ROTTERDAM. 

DELAYS DETRIMENTAL TO BUSINESS. 

As in other European countries visited the transportation/^question 
comes into prominence in the Netherlands because of the detriment to 
all the interests involved occasioned by the lack of quick dispatch from 
mill to market. If in these reports I seem to dwell upon this subject 
it is because it is found that importers are forced by the facts in 
the case and their unfortunate experiences arising from delays to 
urge the need of such full treatment of the subject as will enlist sup- 
port enough to overcome this long existing evil. 

Unlike many other forms of merchandise, flour is not only a staple 
for prompt consumption upon arrival at destination, but it is unfor- 
tunately subject to fluctuations in value, making delays in its 
transportation dangerous to those engaged in handling it, since the 
possible profit at best is limited to a few cents per barrel. In the 
Netherlands the bakers and dealers generally do not carry large 
quantities in store, and when they buy it is for actual use within a 
short period of time and not for speculative purposes. Delays of 
two, three, and four months in shipment from American mills, not 
as exceptions or as applying to occasional purchases, but as experi- 
enced by all buyers on nearly every purchase they make from year to 
year, bring about such a long list of unfavorable results with Amer- 
ican transactions that the way is opened for the flour of near-by mills 
and those of adjoining nations. Unfortunately for the mills of the 
United States there is abundance of flour obtainable from Germany, 
Belgium, and France, and it will be bought in increasing quantities 
in the Netherlands unless the American railways and the Atlantic 
steamship companies find some way soon to give such expeditious 
and dependable transit to flour as its trade importance deserves. 
There is with the steamship authorities on this side a general recog- 
nition of the need for better service, made evident by the falling off 
in revenues incidental to the loss in American flour trade abroad, 
largely caused, it is alleged, by the carelessness or lack of ability on 
the part of the American representatives of the steamship companies 
at Atlantic and Gulf ports. A grievous fault exists somewhere, and 
it is time the blame was put where it belongs. 

AMERICAN MILLERS SHOULD ACT. 

While I believe the steamship people, generally, will seek from 
now on to rectify the difficulty, the millers of America must assume 
to themselves the duty of following up their shipments by wire 
inquiries for date of dispatch. They should positively locate the 



158 FLOUR AND WHEAT TRADE. 

cause of all delays, and these, when found unreasonable, should be 
made the basis of complaints to the managing directors of the 
steamship companies direct, and not through their American repre- 
sentatives. With complaints enough lodged with the responsible 
heads of these vast corporations, whose revenues depend upon the 
constant increase of traffic, not its reduction, those who ought to 
devise means to avoid delays will be held to a proper accounting. 

In Amsterdam I could secure statements from many importers, 
probably from all of them, that would show an even worse state of 
affairs, as to delay, than some reports heretofore sent in. I only 
call attention to two cases, because it is of no avail to go into details 
when the cases presented are known to represent the general condition. 
Other markets reporting needless delays were doing business largely 
with our mills in the Central States or in Kansas. The two ex- 
amples I give below were of Minneapolis origin. I was shown the 
books of record giving date of shipments, line, route, name of 
steamer, and date of arrival at Rotterdam. It may be borne in mind 
that from a week to three weeks may elapse after arrival at Rotter- 
dam before delivery can be made at final destination, be it Amster- 
dam or some country point. 

CASES OF DELAY CITED. 

Five shipments of 2,400 to 5,400 bags of flour shipped originally in 
carload lots of 600 bags from November 28, 1907, to January 9, 
1908, averaged just 119 days, Minneapolis to Rotterdam, the quickest 
making the trip in 102 days and the slowest requiring 132 days. 

The second list of shipments covers a longer period — a period, 
too, when cars were plenty in America and ocean steamships were 
seeking cargo and bitterly complaining because the traffic was so 
light. These shipments cover 30,600 sacks, or 51 carloads, made 
betAveen January 1 and June 30 of 1908. The average time of 
transit, Minneapolis to Rotterdam, was exactly 85 days. 

Of the losses, vexations, and disappointment to the importers and 
to their buyers depending, as they must, on what they have bought, 
because it was known to be on the way and for which they had paid 
the full value, freight included, long weeks before any notice of 
arrival, it is unnecessary to say more. Any reasonable being will 
draw forceful conclusions. Any responsible head of steamship or 
railroad corporations with knowledge of the details of such lack of 
care of patrons' interests will not be long in finding a way to bring 
about reform. But such details must be supplied by the shippers 
themselves, and they must land direct on the desk of the responsible 
head. 

It has been said with much appearance of plausibility that if 
millers would contract for specific date of sailing from seaboard 
unnecessary delays would be avoided. If the past conditions were 
the result of congestion and unavoidable circumstances extending 
from month to month, making such delays as occurred a necessary 
fact, how could a specific contract against such delays have operated 
to prevent them ? If not necessary, where is the system at fault that 
permits delays to occur? 



TKANSPORTATION. 159 

OVER ONE HUNDRED DAYS IN TRANSIT. 

At hand is a case where an Amsterdam concern bought 600 bags 
of flour from a mill in Minnesota and which was shipped on Febru- 
ary 27, 1908. It was specifically engaged by the mill for clearance 
from seaboard within thirty days from date of shipment or from 
date of arrival at seaboard. It arrived on this side on or about 
June 12, 1908, just one hundred and six days after shipment ! Since 
it was on the sea but ten or twelve days, who is responsible for the 
delay that held it on the railroad or at an American seaport the 
ninety-four or more days that elapsed, and where is the system at 
fault that permits such a delay to occur when specifically contracted 
against? I have all the data relating to this case, but it should be 
unnecessary to refer to them since the facts are stated simply to 
point out the futility of trying to protect by special contract a com- 
modity, the very nature of which should entitle it to the best treat- 
ment possible, but which under the faulty management existing at 
the time seemed to get no special recognition whatever. This case 
has been put into a claim and should be followed up until the parties 
at fault are fully exposed, not vindictively, but for the purpose of 
righting a system that needs to be remodeled. Transportation facili- 
ties to be of aid in building up American commerce must be made 
efficient and dependable. 

NEW STEAMSHIP LINE PROPOSED. 

In regard to the matter of new trans- Atlantic freight line from 
Atlantic ports to this side, I have conducted inquiries as best I could. 
There is in process of formation such a line by interests in Denmark, 
Norway, and Sweden to facilitate the more direct shipment of goods 
from the United States to those countries. I am reliably informed 
that the new line will work in harmony and cooperate with the 
Scandinavian-American Line and the Kussian East Asiatic Line. 

In regard to rates I think that 18 cents America to Helsingfors in 
the season when Baltic navigation is not partially closed (from April 
15 to September 15 to 30) can be made as profitable to the steamship 
lines on full cargoes as the regular rates to the larger ports at 10 cents 
and 11 cents. I can not figure that the cost of transshipping at Ham- 
burg, for instance, need be placed above 1 cent per 100. This, with 7 
cents per 100 Hamburg to Finland (which seems to be ample) and a 
current rate of 10 cents American ports to Hamburg, makes a through 
rate of 18 cents. If the new line can secure straight cargoes through, 
it might be able to shade these rates somewhat to Finland. It should 
be remembered that after some date in September, varying from the 
10th to the 30th, the Baltic rate advances 50 per cent on account of ice 
dangers and an old-established custom which may or may not justify 
such decided advance. 

THE BALTIC PORTS. 

It should also be remembered that while to British and North Sea 
ports shipments are direct, to the Baltic ports, aside from Copen- 
hagen, they are in the main transshipped by smaller steamers. This, 
of course, is no excuse for any discrimination that may exist, but 
explains the higher rate to Baltic remote points. It may also be that 
through shipments via Hamburg would have to be transported to the 
Baltic by rail, there to be transshipped by small steamer. 



160 FLOUB AND WHEAT TRADE. 

To what extent a new line direct to Baltic ports could avoid the ap- 
parent discrimination will, of course, depend on the amount of busi- 
ness it gets for through shipment. There is nothing in the conditions 
as they have heretofore existed with the old lines to warrant them in 
making a lower transshipment rate on American flour than the cur- 
rent rate on local flour from such transshipping point, for they have 
overlooked the fact of their possible loss of direct shipments from 
America of flour if, in making rates, they favor the European miller. 

VIEWS or A DUTCH IMPORTER. 

Below is a letter on the general subject of American flour trade 
with the Netherlands that so concisely sets forth the salient points of 
interest that I give it in full. It is written by an Amsterdam im- 
porter of many years' experience, whose purchases of American flour 
have run from 400,000 to 600,000 bags per annum, and whose only 
object in writing is to aid in improving conditions so that more busi- 
ness between the two countries may be possible. The letter is as 
follows : 

Importation of United States flour into Holland. — If the American export 
trade to this country is to hold its own several drawbacks should be removed 
which are severely interfering with it. 

Time of shipment. — It is needless to repeat here the disadvantage of the 
present system. We beg to refer in this connection to the statements of the 
British importers and your reports thereabout; conditions prevailing here are 
exactly the same. It may happen that it takes thirty days for a carload to 
arrive here from the mill on your side, but that is an exception, and ordinarily 
sixty, eighty, and one hundred days are required ; in fact, we have had several 
shipments which took one hundred and twenty and one hundred and fifty 
and even one hundred and eighty days, which means a heavy loss for the im- 
porter and produces a lack of confidence on the part of buyers. What we 
want is a guaranteed time of seaboard clearance on through bill of lading, 
say within thirty days from date of through bill of lading. 

Cotton packages often arrive torn and in bad state and the bags are badly 
sewn, which causes short weights. Millers should pay more attention to a 
strong and neat package. 

Weight. — Sometimes sacks are arriving, especially from Kansas mills, which 
do not weigh 50 kilos gross, but 48, 484, 49 kilos, while the bags are good. 
The millers should be very careful in weighing, due allowance being made for 
fresh-ground flour. 

Arbitration. — Any question arising out of a transaction should be determined 
by friendly arbitration at port of destination. 

Maintenance of quality. — It goes without saying that this is one of the chief 
factors for holding the trade, and every miller should do his utmost in this 
connection. 

Competition. — The flour imports from Germany are gradually increasing to 
the detriment of the American flour trade. The increasing German exports 
are rendered possible by the peculiar bounty system of the German Government. 
This system has an unsound basis and is prejudicial to the American flour trade 
wherever American flour is imported. The United States Government should 
pay due attention to this fact. 

SHIPMENTS TO BRITISH PORTS. 

COMPLAINT AGAINST RAILROADS. 

At the convention of the National Association of Flour Importers 
of Great Britain and Ireland, held at Belfast on May 20, 1908, the 
following resolution was fully discussed and unanimously adopted : 

Resolved, That any parcel of flour having once been shipped and a bill of 
lading granted for the same, and the goods thereafter having been damaged 
while in transit, the same must not be reconditioned in transit, but must be 
brought to destination in its damaged condition or otherwise treated as a total 
loss. 



TRANSPORTATION. 161 

The reason for jDassing such a resolution arises from the practice 
of American and Canadian railroads in their efforts to put in good 
order, in transit, such cars of flour as may have been partially 
wrecked en route from mill to seaboard. In the event of such a 
^Yreck the railroad people, whenever practicable, send the remains of 
the wreck back to the mill where it originated for reconditioning. 
The resulting delay in the shipment and the uncertainty in the mind 
of the buyer, who knows nothing of the wreck, has, in instances cited, 
caused much loss and expense to the importers of the flour. 

RESENTMENT AGAINST RECONDITIONING IN TRANSIT. 

The feeling on this subject as expressed at the convention is one of 
deep resentment toward any agency interfering with any shipment 
once the through bill of lading has been issued. Such through bills 
of lading, with drafts attached, are always accompanied by insurance 
certificates, and these are always on their way in the hands of banks 
for collection as soon as the shipment is put in transit. The con- 
signees contend that they are entitled to have the flour go on to desti- 
nation in the quickest possible time, notwithstanding some damage, 
be it great or small, while in transit, and in event of loss they have 
full recourse on the insurance company assuming the risk. They say 
that no one has any legal right to recondition the flour damaged in 
transit, except as may be necessary to get it again under motion upon 
its journey immediately after the wreck. The title of the flour being 
then with the banks, by the terms of the shipping documents, no third 
party, it is claimed, should assume to rehandle or in anywise change 
the character or condition of the shipment. The insurance company 
having assumed the risk, it is the only party concerned in the con- 
dition of the flour. Neither the mill where it was made, nor the rail- 
road transporting it, has any right to do anything other than expedite 
the shipment. 

In the cases that were cited the railroad companies had apparently 
thought to make the best of a bad job by sending the cars back to the 
mill. The latter took its own time to unload, repack, and reload the 
flour, doubtless receiving pay from the railroad for so doing. Thus 
something other than the identical goods covered by the bill of lading 
actually went forward finally, and thus it is claimed that either the 
contents of the cars so reloaded were fraudulent or the original bills 
of lading were fraudulent. Flour so handled might not come to des- 
tination under the same marks or of the same quality as originally 
loaded, for the miller could not be legally held, it is claimed, under 
the bill of lading for the quality of the reconditioned shipment, since 
there is no provision to govern such contingencies. Moreover, the 
shipments might come in two to six months late, as they often do. 

In view of the firm position taken by the flour importers and the 
national association on this question, I think millers as well as ship- 
pers generally should be advised of the point made. Importers are 
obliged to receipt to the steamship companies in full upon the com- 
pletion of the terms of the bill of lading, so their contention may be 
considered well founded when they demand that no substitution for 
any cause be made in the goods originally covered by the documents. 

2804—00 11 



162 FLOUR AND WHEAT TEADE. 

DELAYED SHIPMENTS COSTLY EXPERIENCE OF A LIVERPOOL HOUSE. 

Supplementing the foregoing report on transportation, I submit a 
lietter addressed to me on this subject by one of the oldest houses in 
Livei'pool engaged in the importation of flour. ]t is expressive of 
the situation as viewed by importers generally, tliough I can say that 
l^ss complaint is heard there in regard to delayed shipments than at 
other points. This is possibly because the business with the United 
States has been relatively small from western points. A considerable 
part of the trade is done with eastern mills at or near the Atlantic 
seaboard whose shipments ordinarily make good time. The letter is 
a.s follows: 

We confirm our conversation about the prospects of an improved sale of 
United States flours, and also the difficulties under which business is at present 
worked. In the first place, the competition here is excessive, owing to the over- 
production of the port millers, and it requires a very big inducement indeed to 
get local buyers to handle American flours. The 7 or 8 per cent of American 
flour which is used here at present comes into the hands mostly of the expert 
hakers, who appreciate the value of thes9 goods as compared with English 
manufacture, owing to increased yield, etc. ; but unfortunately a very large 
percentage of the English bakers are shopkeepers merely — that is to say, they 
require a flour ready blended for use without any manipulation on their part. 

One or two of the outstanding difficulties with regard to the trade in American 
flours as compared with that in home flour are, first, the fact that American 
flour must of necessity come along in fair-sized quantities and be tendered to 
buyers as soon as it arrives. The meaning of this is that the quay must be 
cleared within three days of date of tender, and this necessitates buyers storing 
the flour at, of course, considerably enhanced cost, namely, from 9 cents to 12 
cents per sack ; this against the English system of giving buyers a contract for 
four or five different grades of flour at specified differences, and entitling the 
said buyers to call upon the millers for any grade they require at any time, the 
flour to be invoiced as delivered. This of course obviates any unnecessary loss 
of interest or the necessity of having more flour on hand than the buyer wants 
for his immediate requirements. 

INTERESTING EXAMPLES OF TRANSPORTATION DELAYS. 

The worst feature in connection with American shipment is, however, the 
ridiculous and totally unnecessary delay in arrivals which we very often have 
tp put up with, and we can cite to you one or two interesting examples. In 
September and October of last year we bought large quantities of flour from a 
" States " miller — a miller, by the way, with whom we do a very extensive 
business indeed, and whose brands are standard here — and our purchases in- 
cluded a quantity of flour for December- January shipment. At the time these 
purchases were made we requested the miller to ship the fiour in regular lots, 
so that we might have a constant flow of each brand coming in here, and so 
retain our . costomers. The instructions were carefully carried out by the 
miller, as can be judged from the fact that we had 10.450 bags shipped between 
December 2 and January 3, inclusive, on no less than twenty separate bills of 
lading of various dates. In the ordinary course of events the flour should have 
started coming in gradually about flve to six weeks after the first bill of lading 
date — that is to say, roughly, about the third week in January — but, to our 
surprise and annoyance, no flour arrived until the 24th of March, when one 
vessel turned up with the whole 10,450 bags on board. 

CONSEQUENCES OF DELAY. 

In consequence of this delay we lost a great number of customers, who 
turned their attention to either other American brands or else to home-milled 
flours. In addition to that, our sales of these parcels were all at practically 
the highest point of the market and our customers who had resold were com- 
pelled in many instances to cancel sales with their buyers through their inability 
to give delivery when applied for. We were forced to make allowances; we 
also had to store a quantity of the flour, and we had in many cases to give 
three or four times as much credit to our customers as they were entitled to. 



TEANSPOETATION. 163 

Onr actual out-of-pocket expenses amouuted to between fSO and £100 (£== 
$4.86), apart from any risks we ran with regard to financial matters, and we 
are trying to collect tlie expenses in question, but do not know whether we shall 
be successful or not. We lately had another flagrant example of the careless- 
ness displayed by transportation companies with regard to the forwarding of 
flour parcels, this being an accumulation of 4,500 bags of various brands from 
the same mill under bills of lading ranging from Maj^ 9 until June 5, fourteen 
in all, at regular intervals during the time mentioned, and the largest shipment 
on any one was 450 bags. This flour all arrived on July 3, it not being an 
excessive time on passage, but at the same time, the annoyance and loss arose 
from the fact that all the flour had come forward in one bottom instead of 
coming forward gradually. All this kind of thing could be obviated by the 
millers giving seaboard bills of lading, and if they would only realize the 
importance of this we are sure trade here would increase rapidly. As things 
are at present buyers never know when they will get their flour if it is bought 
for shipment, and they also do not know whether they will get it in small lots 
or in ridiculously large quantities. 

We are afraid the millers in the States do not realize what heavy expenses 
there are at this end in handling. Anj'^thing you can do in the interests of the 
import trade we are sure will be very much appreciated, as it has for a long 
time been a declining business, and it will need some better facilities with 
regard to shipments, etc., if any good is to be done. 



RESTRICTION OF SPECULATION. 

PROTECTION FOR CONSUMERS IN GERMANY AND FRANCE. 

As a general proposition flour milling in Europe is not handi- 
capped nor embarrassed by undue or violent fluctuations in the price 
of wheat. Markets are inclined to stability. They are less suscep- 
tible to daily or frequent change in values incident to the constantly 
shifting sentiment that in recent years has characterized the grain 
markets of the United States. In Europe the function of wheat is 
conceded to be the ultimate production of flour for human food. In 
the United States, where more wheat is produced and consumed for 
food than in any other country, the elevator interests and the specu- 
lative element at terminal markets have more to do with the arrange- 
ment of price than the miller who grinds it into flour or the people 
who consume it. This is not an unusual condition in the United States 
when wheat is worth more to speculate with than to make into flour. 
The market may be stimulated b}^ reports and rumors that excite the 
speculatively inclined to purchases of both cash wheat and futures 
until a price level is reached quite beyond the ability of flour millers 
to pay. Then they are forced to shut down their plants and see the 
trade abroad, which they might have had at a fair price level, go to 
the mills of other countries, where the laws or public sentiment, or 
both, tend to the curtailment of foodstuff speculation to limits indi- 
cated by the average or assumed demand for actual consumption. 

EXACTIONS ARISING FROM SPECULATION. 

The American people pay the enhanced cost for breadstuffs brought 
about by speculative advances for temporary and sometimes pro- 
longed periods. Some speculators profit thereby. Fortunate owners 
of large stocks bought when prices were low and sold when the wave 
of excited buying had carried prices up have reaped fortunes. So 
with speculators in futures who were wise enough to buy and sell at 
the right time. So also the originators of the real forces underlying 
the market movement, if the course of events proved their ability to 
gage just how much of fiction and stimulation the public would 
stand and they succeeded in unloading before a contrary trend of 
market feeling, which may be equally manipulated and artificial, was 
developed. But the shifting of values, violent as it often is, afford- 
ing profit to some and forcing losses on others, adds nothing to the 
general wealth. The gain to one is a loss to another. The money 
only changes pockets. 

OPERATIONS IN FUTURES. 

Time was when foreign capital was attracted to the United States 
because of the facilities American markets seemed to offer for the 
purchase and protection of vast supplies of grain. When the United 
States was a more important factor in contributing to the surplus 
supply of wheat and corn than has been the case in recent years, her 
market facilities, elevators, and boards of trade were made use of 

164 



EESTRICTION OF SPECULATION". 165 

generally by foreign grain buyers. Then the speculative opportuni- 
ties for hedging or protecting purchases by sales of futures were 
availed of by the foreign buyer and in a large way. It came to pass, 
however, that the operation generally proved far more profitable to 
the American than to the foreigner. The latter found out how the 
system worked, paid for the experience, and quit the field. To-day 
he is helping the development of grain raising in Australia, Argen- 
tina, and Canada. He looks to the United States for wheat only 
when he can not possibly supply himself elsewhere. He even com- 
plains that the same American grain trade that permits manipulation 
of futures also fails to give him, when he is obliged to buy, the grades 
his contracts seem to call for. He has made his complaint known 
through the International Grain Committee, an organization com- 
posed of delegates from the various grain exchanges of Great Britain 
and Europe, and this committee is now laboring with the grain ex- 
changes of America, and has done so for more than a year, to bring 
about such grain grading at American ports as will not be deceptive. 
The foreigner is not likely to largely patronize our system of grain 
futures so long as he lacks faith, as he certainly does now, in the 
quality of actual deliveries. 

ABUSES OF OPTION TRADING. 

So the dealing in futures, or option trading, has ceased to be of 
material value as an agent for attracting any considerable foreign 
trade to the United States. Its usefulness in quickly and safely mov- 
ing large quantities of grain to terminal markets early in the move- 
ment of crops may not be disputed. Conservative and able men have 
recognized and championed the American option system, and their 
influence has heretofore prevented legislation adverse to it. But be- 
cause of the evils attendant upon the abuse of privileges and oppor- 
tunities the present system affords, public attention may well be 
directed to corrective measures. Such is the advice of men prominent 
in international trade in every city visited in the past nine months. 
They are buyers of American flour and grain. Most of them are 
forced to maintain connections with exporters in other countries tlian 
America because of the irregularity and uncertainty that prevail in 
American values and grain market methods. They would naturally 
give millers of the United States the preference, but are obliged to 
take on accounts with countries whose price basis is more dependable. 
The advice and suggestions they offer are disinterested to the extent 
that, with us or without us, they will go on doing business. As a 
nation we could do much more abroad if we w^ould conform more 
nearly to the requirements and conditions of our foreign customers. 
The question is whether it is wiser to attract trade that will bring 
into America millions more annually for finished products of agricul- 
ture, and amend the option features of grain trading to that end, or 
to continue a system embarrassing alike to exporting millers in 
America and importing houses abroad — a system which has been 
found faulty and defective by every European nation that has per- 
mitted its growth, and which to-day does not exist in Europe because 
of adverse sentiment or restrictive laws. 

Just what the laws are in the various European countries covering 
the matter of speculation in foodstuffs would be difficult to ascertain 
without extended research. It may be sufficient to say that whether 



166 FLOUR AND WHEAT TEADE. 

futures in grain are limited by law or by custom, the sentiment of the 
people in general, and in the grain and flour trade in particular, runs 
favorable to restriction within acknowledged bounds. Trading houses 
that have from time to time attempted to introduce American specu- 
lative practices have had to give up the enterprise for lack of support. 
This has been the experience in English market centers. Option or 
term trading in grain as permitted in Liverpool, London, Berlin, and 
Paris is a more or less prominent feature in the grain business, but 
it does not flourish to the extent of controlling terminal stocks and 
establishing values abcve the parity of outside markets or above the 
ability of millers to pay. The controlling forces, whatever their 
nature may be, confine transactions in future possible deliveries to 
those directly interested and to actual probable requirements. 

TERM TRADING IN FRANCE. 

To make this clearer, the process of grain speculation in France 
may be cited, where term trading is large in cotton and coffee at 
Havre and in sugar at Paris. There is considerable business also 
done in term or future delivery of grain and flour. But in all cases 
the parties to the contract initiate the business because of an actual 
desire to handle the particular commodity dealt in, they being the 
producers or the importers as the sellers, or the manufacturers or 
intermediate dealers as the buyers. Contracts may be and are shifted 
from one to another many times before they mature, but this is done 
in the line of actual business and not as a gamble for the change in 
value. Should it develop upon the maturity of the month or term 
for which delivery was contracted that the available supply was 
less than the contracts called for, the settling price is fixed by the 
rules of the exchanges at not to exceed 6 per cent above the aver- 
age price of actual deliveries made during the month in which the 
contract matures. This restrictive feature, and the unpopularity 
that would attend any attempt to force prices above a fair and 
legitimate level, effectually prevents a " corner " in the commodity 
as understood in the United States. Term trading in wheat is con- 
fined to the needs for milling purposes. There are no centers of 
vast accumulation of grain. Farmers gage their sales with greater 
regularity than in America. Practically one-fiftieth part of the 
French wheat crop is offered for sale every week, and just about this 
much is needed for weekly consumption. There are no rush periods 
for crop marketing. Consequently there are no large stocks at any 
time upon the market subject to concentrated control. Thus in 
France the customs and habits of the people make speculation in 
wheat impossible to the extent of unsettling values. 

SPECULATION PROHIBITED IN GERjNIANY. 

In Germany, in the early nineties, there was much manipulation 
of the values of rye, and of wheat also. But the losses incident 
thereto, and the uncertainty in values that rendered all transactions 
unsafe, soon attracted the attention of the legislative bodies, and on 
June 22, 1896, a law went into effect which prohibited " term " or 
" option " trading in grain and mill products except upon application 
to the Bundesrat, and then only on conditions prescribed by that 
body. This law was replaced by a new enactment on the same sub- 
ject that took effect May 8, 1908. According to the new law, option 
trading may be carried on only under certain limitations and re- 



EESTKICTION OF SPECULATION. 167 

strictions after due application to the Bundesrat. Action can not 
legally be taken to recover losses by reason of differences in price on 
term or option deals. The qualifications, stipulated by the law, 
which form the basis on which application can be made to the 
Bundesrat for license to deal in contracts for future delivery of 
grain and mill products, are such as to discourage the speculative 
element, for licenses are limited to two groups only, as f ollow^s : 

1. To producers or consumers of the actual goods to be dealt in 
under the license. 

2. To merchants or registered commercial organizations whose line 
of business includes the purchase or sale of or loans upon grain or 
mill products. 

The above qualifications are stipulated by sections 63 and 64 of 
the law. Section 65 defines the contracts which must provide as 
follows : 

First. That in case of delay the party not at fault can not refuse 
acceptance of the fulfillment without granting to the party at fault a 
reasonable time of respite for fulfillment of his part of the contract. 

Second. That only such merchandise may be delivered which, 
before being declared for delivery, 'has been examined by sworn 
experts and found suitable. 

Third. That merchandise which is not according to contract can be 
delivered as long as its inferiority does not exceed a certain limit, 
according to experts' opinion, and if due allowance is made to the 
buyer. Should the merchandise be of a quality superior to that con- 
tracted for, such superiority, up to stated limits to be determined by 
experts, must be paid for by the buyer to the seller. 

Section 66 provides that if all the stipulations of the foregoing 
sections are complied with, still the transactions would be illegal and 
void if the intention of the parties to any contract had been to pay the 
eventual difference only. 

The spirit of the law seems to be to require of traders evidence of 
well-defined intention to make ultimate delivery of the grain or mill 
stuffs contracted to be dealt in, and this feature has distinguished the 
previous law, making administrative action comparatively easy and 
preventing all but those interested in the actual grain from getting 
any considerable hold on the market. As dealers to be licensed for 
option trading must prove their status, and since the deals they may 
make are not legally binding unless the original transaction was of 
bona fide intention of actual delivery, they are not likely to lock up 
any considerable sums of money in any other than legal contracts. 
Hence the law automatically prevents a " corner," since attempted 
" corners " can not be of far-reaching importance, unless the out- 
standing contracts exceed the actual commodity. The ownership of 
all the wheat would involve the owner in a conflict with the law, un- 
less he could prove that he intended to convert it into flour. 

GERMAN LAW APPLIED TO UNITED STATES. 

Applied to the United States such a law would limit board of trade 
transactions to producers and dealers in actual grain for final dis- 
tribution, and to millers, all of whom would have to hold themselves 
in readiness to prove up their intention as to the certificates of grain 
held by them, or the contract could not be made binding on the former 
holder or original maker. Grain contracts would come to be " as 



168 FLOUR AXD WHEAT TEADE. 

good as the "wheat,*' and would not be recklessly dealt in by parties 
who, while possessing millions to margin their deals, never actually 
contemplate any other final settlement than the payment or receipt of 
market differences under present practices in the United States, and 
to whom the price to the producer or the cost to the consumer is of 
no direct business interest of theirs whatever. The present system in 
America makes " corners " possible after the farmers have disposed of 
the major part of their production, and hence they receive little 
benefit of advanced prices which the consuming public must pay. It 
also demoralizes the legitimate trading between millers and buyers of 
flour, resulting from enforced and unnatural conditions. Moreover, 
the export trade in flour, and grain as well, is disrupted and often 
altogether stopped. Under laws restricting future purchases to rea- 
sonable and actually intended needs, more stable conditions would 
result, enabling increased expansion of enterprise to prevail in both 
domestic and foreign trade, rendering all investments connected with 
grain and its conversion into food and its final distribution safe and 
permanent, thereby increasing facilities and promoting the interests 
of agriculture. 

These results, incident to stability of values, have been attained in 
Germany under restricted speculative privileges. The legitimate 
business risks of purchases for future probable requirements are not, 
under German methods, as uncertain as they are in the United States. 
The needs of the country in the marketing and distribution of the 
crops and food products are not hampered ; on the contrary they are 
promoted. Needful speculative enterprise, the anticipation of future 
conditions and correct analysis of them due to special study or 
capacity to grasp the trend of effect from known causes, is not throt- 
tled by German law; but downright and harmful gambling and 
manipulation, the creation of false and misleading sentiment are 
all held in check. Farm prices for grain are more equable and aver- 
age as well as elsewhere, for after all the average value of the world's 
grain is what it is worth the world over for conversion into human 
food. 

The elimination of uncontrolled speculation in food products in 
Great Britain and all the countries of northern and western Europe, 
whether accomplished by law or enforced by public and commercial 
sentiment, has given a sense of soundness and security to all invest- 
ments allied with or dependent upon grain production that has not 
existed in the United States since the introduction of modern option 
trading, with its unlimited possibilities for evil. 

THE BLEACHING PROCESS. 

There is no law in France, Germany, or Great Britain prohibiting 
or regulating the bleaching of flour by chemical or electrical process. 
As in the United States, some millers in all the countries named 
oppose bleaching, or find no need for it, while others employ it. 

Recently the Alsop Company (electrical process) was sued by the 
Andrews Company (chemical process) before the Lille (France) 
tribunal. The case went to the court of appeals, which has rendered 
its decision incidentally affirming that the bleaching of flour was an 
improvement, and that it was not injurious to public health. 



LE S '09 



